## Canada’s Cannabis Market Hits a Growth Stalemate: What’s Still Selling in 2024?
Canada’s once booming cannabis market has hit a wall in 2024, showing nearly zero growth in consumer sales. This stark contrast to the double-digit gains of previous years has left many wondering what the future holds for the industry. While overall sales might be stagnant, the market is far from dead. Certain product segments are still seeing strong consumer demand, leading to a shift in both consumer preferences and competitive dynamics.
Flower Segment: A Stable Landscape Amidst Shifting Dynamics
The flower segment, the traditional mainstay of cannabis sales, continues to hold its ground in Canada. However, the landscape is shifting within this category. Village Farms, with a 15% market share, currently leads the pack, though its dominance has slipped slightly from 17.4% in Q2 2024. Close behind are Tilray at 12.8%, Organigram at 10.8%, and Cronos at 6.1%. Mid-tier players like Auxly, Canopy Growth, and Cannara Biotech are also vying for a share of the market, each holding between 2-5% of sales.
Average flower prices have stabilized at CAD 5 per gram ($3.70), a slight increase from CAD 4.80 last year. However, individual prices can vary slightly depending on the producer.
Pre-Rolls Gain Momentum: Decibel Leads the Infused Joint Charge
The pre-roll segment has reached a significant milestone, now accounting for 35% of the market, mirroring flower sales. This shift in consumer preferences highlights a growing demand for convenience and ease of use. Decibel, with a 10.8% market share, dominates the pre-roll landscape, followed by Tilray at 8.5%, Organigram at 6.4%, and Village Farms at 5.4%.
Within the pre-roll category, joints are currently leading with 55% of sales, while infused joints account for 27%. While Decibel was once a dominant player in the infused joint segment with a 55% share in Q3 2023, its dominance has decreased to 38% in Q3 2024. Other notable pre-roll players include BZAM with 4.2%, Weed Me (private) with 3.9%, and Auxly with 3.3%.
Vape Segment: Motif Labs Takes the Lead in 510 Cartridges
Vapes now account for 16% of the Canadian cannabis market, and the segment is dominated by Motif Labs with a commanding 20.6% market share. Following closely are Auxly at 12.9%, Decibel at 9.7%, and Cronos at 7.3%.
The 510 cartridges, especially in 1ml and 1.2ml formats, are driving vape sales with 74% of the market share, highlighting their popularity among consumers. Disposables and live resin cartridges have smaller shares, while closed-loop systems account for just 2% of sales. Tilray and Cannara also hold significant shares in this segment, at 4.9% and 3.4%, respectively.
International Ventures: The Next Growth Frontier?
As the Canadian market experiences stagnation, investors are increasingly focusing on companies with international strategies, particularly in light of potential US regulatory reforms. Canadian cannabis companies are now actively positioning themselves for US entry and European expansion, shifting their focus away from local sales growth. Global ventures are seen as a crucial source of future revenue as companies seek growth beyond Canada’s limited market.
The Canadian cannabis market is evolving, and while growth may be slowing domestically, the future looks bright for companies with a global outlook and a focus on innovation and diversification. As the industry continues to mature, we can expect further shifts in consumer preferences, product offerings, and market dynamics.
