2025 Canadian Cannabis Market Outlook: Sales Trends, Pricing Shifts & Consumer Behaviour

Retail cannabis sales hit C$466.7 million in April 2025, up 6.6% year-on-year, capping off a strong spring for Canada’s maturing legal market. With over 3,700 licensed stores, prices near historic lows, and infused pre-rolls and beverages gaining ground, the industry is shifting rapidly.

This report unpacks the key market signals for brands, investors, and retailers: how legal cannabis sales are tracking nationally, what’s changing in product pricing, and how Canadian consumer preferences continue to evolve post-legalization. 

Based on the latest data from Health Canada, StatCan, and public LPs, here’s what you need to know about where Canada’s cannabis market stands—and where it’s heading.

⭐ TL;DR Snapshot: 2025 at a Glance

• Retail Sales (Q1–Q2): C$1.34B
• Wholesale Flower Price (2025 Forecast): $1.61/g (StratCann)
• Product Mix: Dried flower still leads at 61% share (Statistics Canada)
• Legal Usage: 72% of consumers now buy exclusively legal (StatsCan)

National Sales Growth (2018–2025)

Canada’s cannabis market has continued its post-legalization climb. In FY 2023/24, legal retail sales reached C$5.2 billion, a 11.6% year-over-year increase. Monthly trends reveal a maturing yet active consumer base:

Key Monthly Milestones

• Dec 2024: C$498M (Holiday surge)
• Jan 2025: C$450.3M
• Apr 2025: C$466.7M (+6.6% YoY)1

Expect continued seasonal spikes around gifting periods (December) and long weekends. Though monthly growth is tapering, the overall trajectory remains solid as the market stabilizes.

Provincial Breakdown

Top Provinces by Retail Sales (2023/24)

• Ontario:

• • • Recreational cannabis sales totalled approximately CA$2.1 billion between April 2023 and March 2024.
    • Sales are up 12% compared to the previous year.
    • Ontario has the largest number of cannabis stores in Canada, with about 1,457 stores as of mid-2024.

• Alberta:

• • • Saw the big gain in cannabis sales between 2023 and 2024, with around CA$670 million worth of cannabis sold by March 2024.
    • Has around 400+ stores in key cities like Calgary and Edmonton.

• British Columbia:

• • • Cannabis revenue was CA$574.5 million.
    • Sales increased by 18.3% over the previous year, a rise attributed to new retail stores and an expanded product selection.

• Quebec:

• • • The SQDC, Quebec’s only legal retailer for recreational cannabis, reported CA$662.1 million in sales for 2023-2024.
    • This impressive nine-fold increase since 2018-2019 demonstrates a successful transition of consumers into the legal market.

• Newfoundland and Labrador:

• • • Newfoundland and Labrador’s cannabis market grew by nearly 24% in the 2023-2024 fiscal year, reaching $87.6 million in sales.

Standout Performers

• The highest growth: Manitoba with +23.7% YoY growth
• The highest decline: New Brunswick with –4.2% decline

Alberta and Ontario continue to dominate thanks to dense store networks and consumer familiarity, while Quebec’s strict product rules limit market size.

Product-Mix Shifts

While dried flower remains the leading category, its dominance continues to erode as newer formats gain ground.

StatCan’s latest FY breakdown shows:

Product Category	Market Share (FY 2023/24)	YoY Growth
Dried Flower	61.3%	-3%
Inhaled Extracts	29.3%	+59%
Edibles	4.3%	+5%
Beverages	1.6%	+25.9%

Source: Alcohol and cannabis sales in Canada, April 2023 to March 2024

What’s Driving the Shift?

1. Inhaled Extracts (Vapes, Live Resin, Distillate Pens)
   This category exploded in popularity, now representing nearly a third of retail sales. Innovations in portable vape technology, discreet dosing, and flavour variety have made these products especially appealing to younger consumers, particularly Gen Z. Many brands are also releasing high-THC vape carts with refined terpene profiles and ceramic heating elements, offering smoother hits and better flavour preservation. Convenience and consistent potency are key factors behind this growth.
2. Dried Flower (and Pre-rolls)
   Still the cornerstone of the market, but its share is slipping. While seasoned users remain loyal to flower, many are opting for pre-rolls and infused pre-rolls, which offer ready-to-use convenience and stronger effects. Some LPs have adapted by repositioning flower SKUs into multi-pack formats or blending with concentrates to meet changing expectations.
3. Edibles
   Growth has been modest but steady. With strict 10 mg THC caps still in place, edibles serve a niche segment looking for milder or wellness-focused experiences. Chocolates and gummies continue to dominate, but brands are testing formats like savoury snacks and higher-CBD SKUs.

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4. Beverages
   Still a small share overall, but the fastest-growing format after vapes. A 25.9% YoY increase is driven by improved nano-emulsification tech, allowing faster onset and more predictable effects. Fruit-flavoured drinks lead the pack, outperforming beer- or tea-inspired SKUs. Their social, alcohol-alternative appeal makes them a hit with wellness-focused users and new entrants to cannabis.

Pricing Trends

Retail Snapshot

• Cannabis Price Index: ↓ 2.8% (Mar 2023–Mar 2024)7
• OCS Weighted Wholesale: $3.81/g2
• In-store Avg Price: $6–$7/g2

Retailers are grappling with razor-thin margins as customers chase value. The proliferation of bulk formats, especially 28g flower bags and economy pre-rolls, has shifted price expectations downward. At the same time, shelf price compression is becoming a volume play: many LPs are moving inventory with tight margins or even at a loss, especially for non-premium SKUs.

Wholesale Trends

• 2023: $1.07/g
• 2024: $1.28/g
• 2025 Forecast: $1.61/g (StratCann)

Recent trends in the Canadian cannabis wholesale market show dynamic shifts and maturing industry characteristics, with a strong pivot toward premium and convenient product formats such as pre-rolls. 

Wholesale prices are rising due to supply constraints and quality differentiation, despite broader market revenue dips. Medical cannabis and increasing consumer preference for high-quality products are key growth drivers amid regulatory challenges.

Consumer Behaviour (2023–2025)

Consumer Motivations

The leading reasons Canadians use cannabis in 2025 are recreational/relaxation and wellness. In a 2024 survey of nearly 9,000 users, the #1 cited motivation was relaxation (22% of respondents), followed by sleep improvement (15%) and medical/therapeutic purposes (13%).

Demographics & Segments

Millennials are the primary drivers of cannabis sales in Canada and the US, accounting for almost half of all dollars spent. When combined with Gen Z, these two generations make up the majority of consumers, representing 72.1% of sales in Canada.10

Alt text: Cannabis store with various CBD and THC products.

Legal Retail 

Legal cannabis is becoming the default choice for Canadian consumers. In 2023, 71.7% report buying exclusively from legal sources, up from 55% in 2022.¹¹

Top reasons for choosing legal retail:

• Product safety: 38%
• Convenience: 17%

The average Ontario Cannabis Store (OCS) order value remains stable at $84.48, flat year-over-year.²

Retail Channel & Store Footprint

Key Stats (2025 YTD)

• Total Licensed Stores: 3,76112
• New Licences Q1 2025: +168
• Online Sales Share: 18% nationally

Store growth is decelerating as major markets reach saturation. Urban areas like Toronto and Calgary are seeing modest contraction, while underserved cities (e.g. Mississauga) are catching up fast. Delivery remains crucial in ON & BC.

Regulatory & Tax Environment

Excise Pressure

Producers continue lobbying to replace the flat $1/gram excise tax with a percentage-based model. The $0.01/mg THC levy on edibles is also drawing fire for squeezing margins on low-cost products.13

Regulatory Updates (as of mid‑2025)

Health Canada is actively exploring new regulatory pathways for cannabidiol (CBD) products to be used without a prescription.

• Consultation launched March 7, 2025, with a public comment period that concluded on June 5, 2025. The proposal centers on allowing certain CBD products to be regulated as Natural Health Products (NHPs), enabling over‑the‑counter availability for human use.

Competitive Landscape

• In 2023, Tilray completed its acquisition of HEXO Corp., consolidating two of Canada’s prominent cannabis licensed producers. The merger was expected to generate more than $27 million in annual cost savings through synergies across production, marketing, sales, and distribution, as well as other efficiencies.

Tilray’s financials reinforce this market leadership: the company posted a 10.8% average annual revenue growth over three years, and achieved 11.2% year-over-year growth (from $743M to $827M). Still, industry headwinds persist – Tilray’s latest quarter saw revenue slip 1.4% to $186M, reflecting continued pricing and competitive pressures.

• Aurora: Meanwhile, Aurora Cannabis is navigating a more volatile trajectory. The company reported C$90.5 million in quarterly revenue, with Canadian medical cannabis sales up nearly 50% year-over-year to C$67.8 million. Net loss narrowed to C$17.2 million, an improvement from C$20.3 million the year prior. However, Aurora warned of “temporary declines” in international markets, which it expects will offset domestic medical growth. This outlook triggered a sharp 17% drop in Aurora’s U.S.-traded shares in June 2025, though the stock remains up about 14% year-to-date.

Outlook & Predictions for 2026

Retail Cannabis Sales

Canada’s legal cannabis retail market is projected to grow toward C$6.3 billion by 2026, up from approximately C$4.7 billion in 2022. This trajectory implies continued recovery and expansion, driven by both increased consumer adoption and broadening product offerings.

Wholesale Flower Price Stabilization

Wholesale flower prices have rebounded in recent years, from about $1.07/gram in 2023 to $1.28/gram in 2024. The Canadian Cannabis Exchange projects further stabilization, with prices expected to rise toward C$1.61/gram in 2025—suggesting a price plateau around C$1.60/gram as the market balances supply and demand.

Beverage Share

The cannabis beverage category remains a small but fast-growing part of the industry. Globally, the market was valued at US$1.3 billion in 2024 and is projected to more than double to US$3.1 billion by 2030, reflecting a 16.3% CAGR. Within this, non-alcoholic cannabis beverages are expected to drive the bulk of growth, expanding at a 16.8% CAGR to reach US$2.1 billion, while the alcoholic segment is forecasted to rise at a 15.3% CAGR over the same period.

Key Risks

Illicit Cannabis Market

Canada’s excise tax regime—charged at a floor of $1 per gram or 10% of the producer’s price (whichever is higher)—remains a major burden on licensed producers. Aside from raising costs for legitimate businesses, it contributes to a thriving illicit market that undermines the regulated sector. In mid‑2025, the Cannabis Council of Canada estimated that 25–40% of cannabis sales in Canada remain illicit, demanding urgent attention and reform.

Persistence of Illicit Vapes

Despite significant strides in legal sales penetration, illicit products – especially vapes – remain a persistent threat. Illegal vape cartridges often evade regulatory conformity, contributing to consumer safety risks and revenue leakage. While legalization has made strides in displacing the black market, especially in dried flower, ongoing illicit vape sales continue to undermine regulated channels.

Investment Freeze & Reduced Capital Access

Regulatory uncertainty, high operational costs, and excise tax pressures are squeezing legal operators and deterring investment. Many licensed producers – notably smaller and craft businesses – face roadblocks in accessing capital, stifling growth and innovation within the legal supply chain.

FAQs

Why are cannabis prices still falling? 

Heavy competition, oversupply, and value pack formats are driving prices down. Many LPs are selling below cost to maintain shelf space.

Will the excise tax change in 2026? 

Reform is likely under discussion, especially as industry pressure mounts. No federal update has been confirmed.

Is consumer demand slowing? 

Not exactly. Growth is stabilizing, but consumer spending and product variety are both increasing.

Which province has the highest per-capita spend? 

According to Statistics Canada, in the 2023/2024 fiscal year, Yukon recorded the highest recreational cannabis sales per person of legal age, at approximately C$356. By comparison, Québec had the lowest per-capita sales, at around C$96.

Final Thoughts

Canada’s cannabis market in 2025 is growing, diversifying, and professionalizing. Sales are up, but margins are tight. Consumer behaviour is shifting toward convenience and premium options, while policy discussions around tax and CBD signal change on the horizon.

With pricing stabilizing and store networks nearly saturated, brands that lead in innovation, compliance, and customer loyalty will shape the next chapter.

Have insights or questions about where the market’s heading? Drop a comment below – we’d love to hear your take.

 

References: 

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