Ontario’s Legal Market: Highlights of the Past Five Years

The legal market gives adults safe access to tested, traceable, quality cannabis products, and the OCS plays a big role in this work as the largest centralized wholesaler of legal cannabis in the world.

Five years into legalization, greater access to legal products and increased cannabis literacy means attitudes to cannabis are shifting. As of 2021, nearly 64 million grams of legal cannabis have been sold across the province, and nearly half of all Ontarians report having consumed cannabis in the past year.

As we approach the five-year milestone of legalization, we’re looking back at how the industry has grown, and taking a moment to appreciate some of the people who continue to propel our vibrant cannabis marketplace forward.

Legalization’s evolution

“I cannot believe it has been five years!” says Katie Booth, director of Indoor Cultivation and Genetic Strategy at FIGR. “When we were gearing up for legalization and packaging our very first orders, I remember thinking, ‘Pre-rolls? No one is going to buy pre-rolled joints!’ and boy, was I ever wrong!”

Across Ontario, whole flower and pre-rolls remain the most popular products among consumers. While these remain classics, consumers are increasingly seeking out new or innovative products. Some of the most popular search terms on OCS.ca include CBD, CBD oil, seeds and hash. Trending items over the past year include savoury edibles such as jerky and macaroni and cheese, as well as condiments like ketchup and ranch dressing.

Dr. Preeya Chauhan, owner of Pufftastic Cannabis Company, notes that it’s not just the variety and selection that have evolved since 2018 — it’s also the industry players. “In the beginning, it was only big corporate Licensed Producers. Now we see [legacy] market converters, micro growers, producers from the medical-cannabis industry, etc. That has added to the diversity.”

Canadians’ attitudes to cannabis

Chauhan recalls an interaction with a passerby as she and her brother were putting out the “coming soon” banner for their store. “An older gentleman decided to stop to debate cannabis legalization,” she says. His fear was that legal cannabis stores would “make everyone ‘stoners.’” Chauhan did her best to explain to him why someone may choose to consume cannabis. “Now he is a [converted] regular customer and true believer in this wonderful plant.”

According to a recent survey conducted by the OCS, two-thirds of Ontarians have positive feelings toward cannabis consumption since legalization. Chauhan has also seen how cannabis customers have become educated and quality-minded, from first being confused about whether Pufftastic “even sold weed,” to now purchasing products based on terpene profiles and minor cannabinoids instead of high THC percentages.

The impact of the legal market on industry players

Both the retailers and producers we spoke to agree legalization has been a step in the right direction. “Without legalization, there would be no retailers,” says Chauhan. “We would still be buying [legacy] market products from possibly random people with no quality control.” Product safety has become an important factor since legalization: Almost half of cannabis consumers say their top motivation for purchasing legal is knowing the products are safe. “I know people who have been ripped off by ordering from unknown sites or new ‘plugs'," Chauhan continues, "and the assurance that people know they are getting regulated and safe cannabis is what keeps our customers coming back.”

Booth sees a positive impact on the Licensed Producer side, too. “Legalization has opened the door for growers to trial and test some amazing cultivars that otherwise weren’t accessible to us,” she says. “With the success of legalization, we have been able to spend the funds needed to improve our growing environment and really dial in our cultivars.”

Where we go from here

Legalization isn’t perfect, and policies are ever-evolving. Although many financial opportunities have popped up, there have been just as many barriers.

• Ontario’s legal market now exceeds illicit sales, with a 59.8% share.

• As of 2022, the legal cannabis industry has contributed $43.5 billion to Canada’s GDP — and $13.3 billion to Ontario’s GDP.

• A lack of diversity industry-wide.

• The environmental impact of carbon emissions, plastic waste and water use.

• Market oversaturation and declining cannabis prices affecting business profitability.

• Prioritizing access to evidence-informed education about cannabis to help ensure consumers have a safer and more positive experience.

We also need to continue acknowledging the problems of the past and finding solutions, says Chauhan. “The struggles of smoking or obtaining cannabis before legalization were real, and the impact on those incarcerated is still felt.” Conversations around cannabis may have become more common and open but there’s still a lot of work to do to make more inclusive policies and eradicate stigma.

That’s where we are five years in. So what will the legal cannabis market look like five years from now and beyond? Time will tell, but the future looks green.