There has been a lot of speculation as to how much the new cannabis market in Canada might be worth. With estimates as high as 22 billion (Deloitte, including ancillary businesses), investors are frothing at the mouth. But attaining data on such matters is tricky. Generally, people don’t report their illegal activities and consumption as a whole cannot be generalized. What one person consumes doesn’t translate over to another, so finding out how many consumers there are doesn’t make for a good foundation of data. Luckily, in Canada we have the massive data agency Stats Can. They have spent their time trying to get a better grip on the numbers, that’s what they do.

In an illegal landscape, Statistics Canada has revealed that Canadians consumed up to 6.2 billion (CAD) worth of cannabis in 2015. They estimate that 697.5 metric tons of cannabis, priced between 7.14 and 8.84 dollars per gram, were ingested by approximately 4.9 million people. In a country of only 36 million, these are huge figures, possibly representing the largest legal market for cannabis in the world. That’s not to say that Canadians are the largest consumers per capita in the substance, but rather our illegal trade in cannabis is flourishing beyond a doubt.

One of the things that are so significant about these figures is that it almost outpaces expenditures on wine, and comes a few billion under what is spent on beer. Each year 7 billion is spent on wine, and 9.2 billion is spent on beer. So perhaps when cannabis is legalized next summer, ease of access and legality will bump up the percentage of people buying cannabis on a regular basis.

On Wednesday, September 18, 2013, Frank and Michelle show how their business of providing marijuana

Tracking the cannabis sector is relatively important because first and foremost the government wants to know how it will make it’s money back on their investment. Setting up markets across the province will prove expensive, not to mention additionally training for law enforcement and health agencies. The study on cannabis done by Stats Can was able to determine that in 2015, two-thirds of cannabis users in Canada were over the age of 25, whereas in other eras, cannabis users were mostly youths.

As for the raw sales of cannabis, sales were predicted by Deloitte when they conducted a survey on 5,000 Canadians and they were able to estimate that sales could be worth up to 8.7 billion annually. When considering ancillary products, such as lighting, security systems, and testing labs, the figures are much, much higher.

Another reason for getting such a tight grip on cannabis activities is to properly determine the cost of cannabis once it becomes legal. The idea being that the government will undercut the black market price so that drug dealers will not be able to compete.

But once again getting data on this sort of thing at the moment is rather difficult. People who use cannabis might avoid participating in these kinds of studies or under-report their activities. Sure Stats Can was able to discern that there are 4.9 million Canadians regularly using cannabis, but that figure might be much higher.

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As it stands, the illegal market is already on pace to outdo sales of wine, and could one-day eclipse beer. And that’s under black market circumstances, where generally people conduct their behaviour privately and covertly. When things change next summer some people who would have never sought the illegal route to buy cannabis will be doing so through the legal government sanctioned store-fronts.

If we look to our neighbours to the south, and especially Colorado, we can see that these estimations by Stats Can must not be far off from reality.

In Colorado alone, there are an estimated 600,000 individuals who buy recreational cannabis, and this market generates almost a billion in sales. As a nation, Canadians outdo these numbers big time. Not only do we consume more cannabis, but we have more per capita consumers.

It will be interesting to see what transpires on the monetary front, and how much revenue will be funnelled back into government for building roads and schools etc. When the market finally kicks off, I expect there will be long lines that will drive some back to the black market, but as everything continues to mature the legal stores will be able to account for a large portion of the cannabis numbers in the country.

Categories: InfoPolitics