Cannabis Growing Market in Canada

Report Overview

This study analyzes demand for cannabis growing supplies in Canada by product, market, growing system type, and Canadian province/territory. Growing supplies demand is reported in value terms (US dollars) at the manufacturers’ level. Cannabis production volume (in dry pounds) and value (US dollars) at the growers’ level are also reported.

Cannabis Production

Production volumes and values in this report cover only the dry weight of usable cannabis plant and exclude the value of downstream processing.

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Reported cannabis production numbers in this study refer to:

• all marijuana and hemp (i.e., cannabis containing 0.3% or less THC) produced by known and/or licensed (annual and temporary) commercial cultivators, whether or not that marijuana ends up on the black market (e.g., sold outside of regulated channels)
• marijuana grown legally by individuals at home

While a significant portion of marijuana produced by these growers is eventually sold through illicit channels, these volumes are included to avoid significant underreporting in the marijuana growing supplies market.

In addition, demand data presented for the personal-use residential cannabis growing market assume the bans on non-medical home-grow operations currently in place in Québec and Manitoba will hold through the forecast period:

• Although these provincial bans are not being strictly enforced, they are technically illicit operations for purposes of this study and thus excluded.
• However, because these bans counter federal provisions, they could be invalidated by the doctrine of federal paramountcy.
• If the bans are eventually overruled, personal-use residential demand for cannabis growing supplies will be higher in these markets and thus impact the national total.

Also excluded from this report are:

• marijuana and hemp grown by unknown and unrecorded operations
• marijuana grown illegally by individuals at home
• cannabis illegally distributed outside of regulated channels and sold on the black market

Cannabis Growing Supplies

Cannabis growing supplies demand is segmented by consumables and equipment. Consumables used for growing cannabis include:

• seeds and clones (i.e., cuttings)
• growing media (including soilless types)
• fertilizers and nutrient solutions
• other consumables (e.g., pesticides, fungicides, geotextiles, cleaning chemicals, gloves and aprons, and carbon filters)

Equipment covered in this study are:

• water tanks, irrigation equipment, and hydroponic systems (e.g., plastic water storage tanks and reservoirs; flood and drain tables; hoses, irrigation pipes, and drip irrigation systems; and hydroponic system components such as grow modules, reservoirs, pumps, plastic tubing, and other associated hardware)
• fans and HVAC equipment (e.g., industrial and commercial fans; consumer personal fans; cooling and drying systems; dehumidifiers; air cleaners and purifiers; and pumps, duct silencers, and other HVAC system parts and accessories)
• security equipment (e.g., cameras, motion detectors, video surveillance equipment, and access control systems)
• lighting systems and replacement bulbs (e.g., LED, CFL, and HID lamps and bulbs)
• pots and planters (e.g., standard plastic, ceramic, and metal pots with saucers for catching water runoff; growing trays, boxes, and baskets; fabric pots and grow bags; air pots; and hemp buckets)
• harvesting and trimming equipment (e.g., agricultural harvesting equipment such as tractors and combines; specialty cannabis harvesting equipment such as buckers and dry trimmers; and hand tools such as bud trimmers and trimming shears)
• cloning equipment (e.g., root cubes and trays; seedling humidity domes; clone buckets; cloning machines; and tissue culture cloning equipment)
• other equipment (e.g., garden bedders and tillers; greenhouses; grow tents; monitors and controllers; pH and nutrient testers; plastic sheeting and liners; growing tables, benches, and trellises; and protective glasses)

Markets for cannabis growing supplies include:

• commercial marijuana and hemp (including operations that are fully grown in a greenhouse)
• private-use residential marijuana (i.e., personal home-grow operations)

Growing system types include soil-based and hydroponic systems.

Sales of Cannabis Growing Supplies Expand at Fast Pace, in Line with Canadian Hemp & Marijuana Outputs

In October 2018, the Cannabis Act legalized adult-use (i.e., nonmedical, recreational) marijuana in Canada and supplanted previous regulatory regimes for medical marijuana and industrial hemp. As legal operations continue to develop nationwide and federally licensed production expands to meet demand, significant sales opportunities will arise for suppliers of the consumables and equipment used in federally licensed production of hemp and marijuana.

As a result, the Canadian market for cannabis growing supplies is expected to expand 11.7% per year to US$1.8 billion in 2023. Cannabis (i.e, hemp and marijuana) production will expand at the same yearly rate and be the primary driver of sales gains. Also boosting sales will be:

• rapid growth in federally licensed marijuana production – which generates higher-value sales than hemp operations – supported by the formation of legal retail markets at the provincial level under the Cannabis Act
• expanding opportunities for hemp producers stemming from rising consumer interest in CBD-infused food, beverages, supplements, and other products

Key Findings in the Cannabis Growing Market Study:

Robust Expansion in Commercial Marijuana Production to Drive Sales

Robust anticipated expansion in marijuana production volume of 30% per year will drive gains for cannabis growing supplies. Despite accounting for a marginal share of cannabis production volume, marijuana operations represent nearly half of production value:

• While hemp is relatively inexpensive to produce, marijuana operations are most likely to operate indoors and require complex and expensive supplies.
• Particularly high marijuana production activity in British Columbia and Ontario supports high market values.
• Nevertheless, the hemp-focused markets of Alberta and Saskatchewan will continue to lead the growing supplies market based on their output volumes.

As regulated commercial marijuana markets continue to develop nationwide, demand will expand for supplies such as hydroponic equipment, high-intensity grow lights, HVAC equipment, and specialty soil amendments. However, because most equipment types have long lifespans, demand for consumables – an ongoing seasonal need – will grow faster.

Rising Demand for CBD Is Spurring Sales of Hemp Growing Supplies

The emerging market for health products, cosmetics, pet supplements, and other goods infused with cannabidiol (CBD) enabled by the 2018 Cannabis Act is creating major new opportunities for Canadian hemp producers and even inspiring food and beverage firms such as BevCanna to invest in hemp capacity. As hemp production expands nationwide, sales of related seeds, irrigation systems, security equipment, and other products are projected to rise at a fast pace. However, since hemp is typically grown outdoors, the need for some high-value equipment (e.g., lighting and hydroponic grow systems) is limited.

Alberta & Saskatchewan Lead in Consumables & Equipment Demand for Cannabis Production

Alberta will remain the leading Canadian market for cannabis growing supplies, supported by high hemp output and comprehensive regulation of adult-use retail markets, which has enabled accelerated growth of its cannabis industry compared to other provinces. Based on its extensive existing hemp capacity and low marijuana production levels, Saskatchewan will remain the second largest market while advancing at the slowest pace of any province.

Study Coverage

This Freedonia industry study analyzes the US$1.2 billion Canadian cannabis growing market – including consumables and equipment used to grow hemp and marijuana. The study presents historical demand data for 2018, and forecasts for 2019, 2023, and 2028 by product type (seeds & clones; growing media; fertilizers & nutrients; other consumables; water tanks, irrigation, & hydroponic equipment; fans & HVAC equipment; security equipment; lighting systems & bulbs; pots & planters; harvesting & trimming equipment; cloning equipment; other equipment). Demand is also segmented by market (commercial, private-use residential); growing system type (soil-based; hydroponic); and Canadian province (Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Quebec, Saskatchewan). In addition, the study provides historical production data for 2018, and forecasts for 2019, 2023, and 2028 for Canadian hemp and marijuana in dry pounds (further segmented by operation type) and value (further segmented by application). This report also features a detailed overview of the regulatory environment, including up-to-date analysis of federal and provincial regulations regarding production, access, possession, use, and sale of industrial hemp, CBD products, medical marijuana, and adult-use marijuana.