Licensed cannabis stores strongly boosted legal sales but barely affected user numbers.

What is it about?

This study analyzed changes in Canada’s cannabis users, legal recreational sales, and licensed stores from 2018 to 2020. It found that licensing more stores greatly increased legal sales while barely affecting user numbers. More specifically, differences in provincial store growth explained 46% of the variation in provinces’ sales increases. That’s a lot, given the many factors (prices, product selection, weather, etc.) that influence sales. But surprisingly, growth in stores and users were only weakly related. Increased stores explained only 8% of the variation in increased users. A simple linear trend better explained user growth.

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Why is it important?

Previous research in Canada and in US states found more people using cannabis after legalization than before. The growth has often been blamed on increasing numbers of licensed stores. That concern has prompted jurisdictions to limit stores numbers. Furthermore, some municipalities in Canada and many in the USA have opted out of allowing stores. My research suggests such measures are counterproductive. Canada was only the second country to legalize recreational cannabis use nationwide, and the first to do so with extensive business involvement. Its experiences might help other countries that are considering cannabis legalization in some form.

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