Marijuana Impact on Canadian Economy
The marijuana boom and what weed has done overall for the Canadian economy over the past 2 years has been astonishing to say the least. In the months leading up to the legalization of cannabis in Canada, experts weren’t really 100% sure what the impact would have over Canadian society, specifically in reference to what the economic effects of “Cannabis Canada” would have over the red maple leaf’s country. Well, now that almost 2 years have passed ever since the legalization of marijuana in Canada, we are now able to look at the economic impact of weed in retrospect and truly realize the magnitude of how much money has been pumped into the gross domestic product of Canada.
According to StatsCan (Statistics Canada), Canada’s cannabis industry generated about $8.16 billion to the nation’s economy. Statistics Canada also said that the legal cannabis industry contributed about $3.96 billion to Canada’s gross domestic product as of February 2020. To put into perspective how high that number is, that’s up 215 percent since recreation cannabis was fully legalized in October 2018. We can reasonably expect this number to increase over the coming years as the legal cannabis industry becomes more rooted into Canadian culture leading more citizens (and tourists) to visit dispensaries located across the country. With this number only increasing, we can also make a reasonable deduction on how Canada’s black market marijuana sales output will continue to drop as more and more people visit legal dispensaries
As for the actual sales tax numbers the government would be making, it’s not as high as some would have predicted. Although the government of Canada is making extra money just from the pure sales tax of each sale, numbers have significantly fallen under what the expectation originally was. With Cannabis excise tax revenues coming in at roughly half the original estimates, marijuana hasn’t exactly proven to be the cash cow the Canadian government expected to be. According to the National Post, in the first fiscal year that marijuana was legalized, 2018–2019, the government took in $18 million in cannabis revenues, however the government actually expected to take in at least $35 million. Like we mentioned earlier, that’s almost half of the government expected. This year, the government expected it would bring in $100 million in tax revenues..however that number has now drastically dropped to only $66 million in expected tax revenues. The Nation Post continues to report that the government believes the tax revenue number will increase to $135 million next year and will have a steady increase until $220 million 2023.
With the way the current numbers have failed to live up to expectations, can the Canadian government realistically expect to hit these tax revenue numbers? Only time will tell, but if the past is any indication it’s not looking too good for the tax numbers. The tax revenues is one of the biggest reasons why Canada legalized weed, but the marijuana money hasn’t been as big as the experts once predicted, at least in terms of Canada’s government tax revenues. We should also recognize that we can reasonably expect Canada’s marijuana sales numbers to increase as more time passes. The “drug addict” stigma that is associated with marijuana is still strong in Canada and only time will remedy this unfair label. As this label slowly removes itself from Canadian society, it is safe to assume that sales will only increase as the legal marijuana industry fully ingrains itself into Canadian culture.