Ontario Cannabis Market Analysis: Canada's Largest Market, Two Very Different Numbers
Ontario is Canada's largest cannabis market by a wide margin: 441 million grams sold for $2.28 billion in 2025 through 1,780 authorized stores at year-end. The Ontario Cannabis Store (OCS) is a third structural variant in this series. Unlike Alberta's private retail (wholesaled through AGLC) or Quebec's government monopoly, OCS wholesales to private brick-and-mortar retailers and also runs its own online storefront, OCS.ca; private retailers can sell online and deliver too. British Columbia's LDB, by contrast, also operates 39 government stores. Against this analysis's modeled demand baseline, Ontario's retail volume works out to roughly 51% of demand, almost identical to BC. OCS's own estimate for fiscal 2024-25 is much higher: 72.2% legal market capture. The two measure different things.
Market Overview
OCS buys from federally licensed producers and supplies every retail channel in the province; the Alcohol and Gaming Commission of Ontario (AGCO) licenses the private retailers.
Ontario caps ownership at 150 stores per operator and its affiliates (raised from 75 in January 2024), with no fixed provincewide ceiling on stores. That's a real limit, unlike Alberta, which has none, but far looser than BC's flat 8: 150 of Ontario's 1,780 stores would let one operator hold at most about 8.4%. Cap tightness alone doesn't explain capture differences, since Ontario's much looser limit hasn't produced a result closer to Alberta's than to BC's.
Current State
2025 calendar year: 441,069,676 g sold at authorized stores (up 5.6%) for $2,281,841,116 (up 3.5%). OCS's distribution centre separately shipped 452,590,868 g to stores (up 6%). Because OCS reports wholesale and retail volume separately, this analysis avoids the wholesale-versus-retail conflation seen with Alberta and BC. Store count reached 1,780, up 60. OCS cautions that its onboarding (257) and offboarding (134) counts don't represent net-new openings, so they can't be netted against that change. OCS's fiscal 2024-25 wholesale revenue over grams sold gives a rough all-category proxy of $3.90/g, close to Alberta's $3.80 and BC's $3.72-3.79, which are computed the same way.
Category mix by dollars: dried flower led at roughly $839 million (37%), then pre-rolls at $479 million (21%), vapes at $433 million (19%), and infused pre-rolls at $274 million (12%). Retail volume grew 23.3% in 2023 and roughly 20% in 2024 before slowing to single digits in 2025.
Total Addressable Market and Capture
Ontario's population is about 16.22 million (July 2025), with a legal purchase age of 19. Ministry of Finance projections put the under-15 share at 14.6%; adding four more single-year cohorts gives an estimated 18.5% under 19 (an approximation, not an official single-year figure), leaving roughly 13.22 million adults 19 and over. At this framework's standard 18% participation and 1.0 g/day assumptions, modeled annual demand comes to roughly 868,000 kg.
Against that baseline, 2025's 441.1 million retail grams works out to roughly 51% of modeled demand. Wholesale-shipped grams come to about 52%, and OCS's fiscal 2024-25 wholesale and online sales of 443 million grams (the period its 72.2% covers) also come to about 51%. These are ratios against a modeled benchmark, not a measured legal-market share. Store density is 13.5 locations per 100,000 adults, below Alberta's 18.5 and above BC's 11.8 and Quebec's 1.5.
What OCS's Own Numbers Show
OCS has published a legal-capture estimate for years, and it has risen at every step: 54.2% for the second quarter of fiscal 2021-22 (July-September), then 59.8% for fiscal 2022-23 as originally published. OCS's 2024-25 annual report restates the series: 64.6% for fiscal 2022-23, 69.9% for 2023-24, and 72.2% for 2024-25. It frames the gap in terms of spending (27.8% of consumer spending on cannabis still occurs through illegal channels) and takes legal retail sales from Statistics Canada. It doesn't explain the upward revision of earlier years or how total spending, including illicit spending, is estimated, so the move from 59.8% to 64.6% for the same year can't be reproduced. The figure is absent from OCS's "By the Numbers" consumer reports, and a 2025 Deloitte report prepared for OCS repeats the 27.8%, citing an unpublished OCS Q3 2024-25 estimate.
OCS's figure is a share of consumer spending, while this analysis's 51% is a volume ratio against a modeled benchmark built from population and consumption assumptions applied identically across every province in this series. OCS's number is also the agency's own estimate of its performance against its mandate "to provide a competitive alternative to the illegal market," using a method it hasn't published in enough detail to reproduce.
A peer-reviewed estimate gives a national comparison. A 2025 University of Waterloo study in the International Journal of Drug Policy put Canada's legal capture at 78% of cannabis expenditures in 2022, using self-reported survey data cross-validated against government sales (Ontario's self-reported legal expenditures came within 4% of reported sales). Statistics Canada's separate household-expenditure estimate for 2021/22 was 68%. Two national estimates for essentially the same period differ by about 10 points, reflecting different survey inputs and methods. OCS's 72.2% covers Ontario and a later period, so it isn't a third point on the same spread.
None of these are volume figures, and the same paper explains why that matters: expenditure-based capture reads higher than volume-based capture when illicit prices run below legal ones, because heavy consumers pay less per gram, buy illicit more often, and are underweighted in dollar terms relative to their share of physical volume. That mechanism depends on the price relationship and can't back out OCS's implied volume without a legal-versus-illicit price model OCS doesn't publish. As a consistency test only: if 51% were the legal volume share and 72.2% the legal spending share of the same market, legal cannabis would have to cost about 2.5 times as much per gram as illicit to reconcile them through price alone, a very large premium. That leaves market size as the other plausible source of the gap. The framework's 18%/1.0 g-day inputs are population-wide averages, not a claim that every participant consumes a gram daily. A heavy-user minority far above that and an occasional-user majority far below it can average to the same figure while implying different total market sizes, depending on the distribution. Neither source discloses enough to settle it.
Price and Tax
Ontario's all-category wholesale proxy of about $3.90/g sits close to Alberta's and BC's, so wholesale price alone doesn't explain the gap between Alberta's 72% and Ontario and BC's ~51%; near-identical wholesale prices should have produced more similar results.
Canada's federal excise duty on dried flower is the greater of $0.25/gram or 2.5% of the producer's price, plus an additional duty of the greater of $0.75/gram or 7.5%, together the greater of roughly $1/gram or 10%. With wholesale at $3-4/gram, the producer's price is lower still, so 10% of it is far under $1 and the flat $1 binds, charged per gram regardless of price. Several provinces add an "adjustment" calculated on a price-based statutory amount rather than on the $1 duty: Alberta's is 16.8%, Ontario's 3.9%. That complicates any simple "Alberta has lower taxes" claim: Alberta's excise adjustment rate is more than four times Ontario's, even though its retail sales tax (5% GST, no PST) is lower than Ontario's 13% HST. BC charges 7% PST generally but 20% on vapour products, a meaningful difference given vapes' share of every market in this series; Quebec charges 5% GST plus 9.975% QST.
With this many stacked layers (duty, additional duty, provincial adjustment, wholesaler and retailer margins, and retail sales tax, several varying by product), a single combined tax-burden percentage per province isn't defensible without a basket-of-goods calculation this analysis hasn't built. What's clear is that taxes push consumer prices in every province well above the wholesale figures compared here, and which layer matters most differs by province.
The Comparison That Matters
| Market | Model | Legal age | Ownership cap | Wholesale price | Grams per resident | Framework capture | Density (per 100k) |
|---|---|---|---|---|---|---|---|
| Ontario | Private retail + govt online (OCS.ca) | 19 | 150 stores/operator | ~$3.90/g | 27.2 | ~51% | 13.5 |
| Alberta | Private retail, wholesaled through AGLC | 18 | None | $3.80/g | 36.6 | ~72% | 18.5 |
| BC | Public + private retail, both wholesaled through LDB | 19 | 8 stores/operator | $3.72-3.79/g | 28.1 | ~51.5% | 11.8 |
| Quebec | Government monopoly | 21 | N/A | N/A | 18.3 | ~35.5% | 1.6 |
| Nova Scotia | Government monopoly | 19 | N/A | N/A | 19.6 | ~36% | 9.3 |
| New Brunswick | Public stores + authorized private retail | 19 | Not reported | Not reported | 17.6 | ~33% | 6.2† |
†New Brunswick counts 44 corporate and private stores at year-end; including eight Farmgate outlets it is 7.3.
High Tide CEO Raj Grover hasn't given an Ontario percentage the way he has for BC and Alberta, but High Tide has identified Toronto and Ottawa as difficult illicit-market environments, a geographic pattern rather than a province-wide claim. Toronto's licensing division told a City Council budget committee in January 2025 that it no longer had funding for cannabis enforcement, after obtaining 116 convictions against illegal operators and property owners since 2019; the city now directs unlicensed-store reports to Toronto Police. Police executed four search warrants against unlicensed Scarborough dispensaries between February 26 and March 2, 2026, charging five people and seizing cannabis, vapes, and edibles alongside unstamped cigarettes. Separately, the Project South corruption investigation charged seven serving Toronto police officers and one retired officer; investigators allege four of them took bribes to protect illegal cannabis dispensaries, among other allegations unrelated to cannabis. None of the dispensary-protection allegations has been proven in court.
The Bottom Line
Ontario is Canada's largest cannabis market in absolute sales and store count, but Alberta moves more per resident and has denser retail coverage. Fully private brick-and-mortar retail, a looser ownership cap than BC's, and a wholesale price near Alberta's all fail to separate Ontario from BC's roughly 51% result, and this four-province comparison can't isolate what causes the remaining gap to Alberta. Price and retail access are well supported as influences on legal purchasing in the broader research, but showing their contribution here would take more than a descriptive comparison. OCS's own capture claim has kept rising, including upward restatements of earlier years. This analysis treats it with the caution applied to any government's estimate of its own program, because its methodology isn't published in enough detail to reproduce.
This analysis applies the Dan K Reports Cannabis Market Framework. For methodology, assumptions, and the complete state-by-state comparison, see the framework documentation.