Yahoo Finance Pot shop spending falls in January, the first monthly decline since legalization
Monthly spending at Canadian cannabis stores fell for the first time since recreational legalization, Statistics Canada reported on Friday.
The agency’s latest retail trade sales figures show January sales totaled $53.4 million, a 4.7 per cent decline from $55.9 million in December. StatCan started tracking sales at cannabis stores in October 2018, the month recreational sales were legalized nationwide.
Month-over-month sales declined in 10 provinces and territories in January. Data for Nunavut was not included in the report.
The largest negative swings were in Northwest Territories and Newfoundland and Labrador, where sales dropped 29.8 per cent and 25.6 per cent respectively.
British Columbia and Ontario were the only regions to report an untick. Sales in B.C. climbed 58.43 per cent in January compared to December. Ontario saw sales rise 2.6 per cent.
Canada’s legal cannabis market is a patchwork of public and private online and brick-and-mortar sales, operating to varying degrees of consumer satisfaction.
In Ontario, for example, physical stores will not be able to open their doors until April 1.
Black market sales currently command the lion’s share of cannabis spending, according to StatCan.
Pot shops in Alberta raked in the most money in January with $14.0 million in sales. The province has allowed a robust private brick-and-mortar retail environment to develop since recreational legalization last October.
The sales slowdown at cannabis stores factored into broader retails sales weakness. StatCan reported that retail sales dropped for the third consecutive month in January, due in large part to weak auto sales.
“The retail numbers add to the evidence that rising debt service costs and slower housing markets are slowing household spending growth,” RBC Economics senior economist Nathan Janzen wrote in a note to clients on Friday. “Household spending can no longer be counted on to drive above-trend economic growth in Canada.”
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