Legal Cannabis Accounts For $43.5B in Canada’s GDP Since 2018
According to a recent report, the nascent marijuana industry has added $43.5 billion to Canada’s National Gross Domestic Product since the recreational use of the substance was legalized in 2018. Deloitte reports that sales account for $11B while another $29B are the capital expenditure of the sector.
Even more welcome news are the creation of 98,000 new jobs as well as the $15.1B worth of taxes that went into government coffers. While the industry is still far from reaching its peak, it’s already struggling with fragmentation and high competition.
The Sector is Maturing
The report calls the current state of the cannabis sector “a great success” and predicts even more growth as it matures. According to a study by ATB Capital Markets, marijuana sales in 2022 may go up 19 percent compared with the estimates for the previous year and reach $3.8B.
The 2,000 recreational shops across the country are now competing successfully with the black market which has been pushed online. However, legal shops themselves face fierce competition and struggle with oversupply.
While some experts call the present state of the market unsustainable and predict the consolidation of businesses, the situation seems to be reverse so far. Major players in the industry have been losing their share of the market, and smaller companies have proliferated. This is probably an answer to the concerns that the expected federal legalization in the United States would lead to the dominance of Big Marijuana and leave no chance to a more inclusive ‘mom-and-pop’ model.
Calls For More Equity
The Deloitte report also says that the cannabis industry should adress important social and environmental issues. According to their survey of 700 executives from more than 200 companies, the industry is mostly managed by White males (72%). Another 14% of the management are men belonging to minority groups, 12% are White women, and 2% are women of other ethnicities.
A 2020 study by the University of Toronto had similar findings: most of those who capitalize on the cannabis legalization are Whites although Blacks and other minorities were the primary victims of the decades-long war on drugs.
