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Results from recent studies and the Health Canada 2024 Cannabis Survey, show that five years after cannabis legalization in Canada, the legal cannabis market has displaced approximately three-quarters of purchases from the illegal market. This is good news for all of Canada’s legal weed retailers, and because illegal cannabis sources aren’t regulated, much safer for cannabis users.
Key Cannabis Purchase-Source Facts
- In October 2018, just after legalization, the legal cannabis share of the market was 7.8% and grew to 23.7% by September 2019.
- Legal sales were at first limited because of the unavailability of dried cannabis flower and lack of retail stores.Source for the two facts above: Armstrong, “Legal cannabis market shares”, 2021.
- Five years after recreational cannabis legalization, market share of medical cannabis decreased to 3.7%, illegal cannabis decreased to 24.3%, and licensed cannabis captured 72.0% of the market.
- Cannabis purchases overall have increased by 75% in the past five years, which may have implications for public health.Source for the two facts above: André J. McDonald, “Association of recreational cannabis legalization with changes in medical, illegal, and total cannabis expenditures in Canada”.
- In 2024, 72% of cannabis users reported purchasing cannabis from a legal source (legal store or legal website).
- In 2024, 15% reported obtaining their cannabis from a social source (e.g. friends, family), which is down from 2018
Source for the two facts above: Health Canada, “Canadian Cannabis Survey 2024”.
Why the Legal Cannabis Market is Growing
The legal cannabis market has largely supplanted illegal cannabis for several reasons:
- Legal cannabis accessibility
As more provincially-licensed cannabis retailers opened, users had easier access to a variety of cannabis products. - Prices decreased
At first, cannabis from illegal sellers was much cheaper than cannabis from licensed retailers. Fiver years since legalization, competition and oversupply of cannabis have contributed to cheaper retail pricing. - Variety
Canada’s legal cannabis retailers sell a variety of cannabis products similar to illegal online stores: dried cannabis flower, concentrates, vapes, edibles, plants and seeds.
The government seems to have achieved at least some of their stated goals for legalization: keeping profits out of the pockets of criminals and protecting public health and safety, although the goal of restricting youth access may not have been met . A 2023 survey indicated that use amongst youth aged 16-24 has not declined.
Sources for this Article:
Michael J. Armstrong, “Legal cannabis market shares during Canada’s first year of recreational legalisation”, International Journal of Drug Policy, February 2021.
David Hammond, et al, “Transitions to legal cannabis markets: Legal market capture of cannabis expenditures in Canada following federal cannabis legalization”, International Journal of Drug Policy, August 2025.
André J. McDonald, “Association of recreational cannabis legalization with changes in medical, illegal, and total cannabis expenditures in Canada”.
Health Canada, “Canadian Cannabis Survey 2024: Summary”, (see “Sources and purchasing”)
Need to Apply for a Cannabis License? Thrive Advisors Can Help
Thrive Advisors works with retail cannabis startups and existing licensees throughout Canada. Whether you need to apply for or update a cannabis license, or require guidance through the public consultation process, our cannabis licensing consultants are here for you!
