Cannabis’ Economic Impact on Canada

The wait for the legalization of weed in Canada is over and businesses and consumers alike are embracing the change. But what does the post-legalization era mean for the economy? How do attitude changes and the mainstreaming of recreational marijuana help Canadians? There’s no doubt that the new industry is going to big.

According to a news report from Global News, experts believe that the industry will bring in revenue that could total between $4.9 and $8.7 billion a year. The news report also highlights a very interesting fact: home prices in Denver, CO (Colorado being the first state to legalize weed) saw an increase of CAD $33,600 just for being near a marijuana retail store. Canadians may be able to expect a similar impact on housing prices, especially where upmarket retail stores are found.

Because the government takes a cut from marijuana sales, either in the form of sales tax or by selling directly through Crown corporations, you can also expect those funds to be injected back into the economy.

When it comes to international growth, the CEO of the Canadian cannabidiol biotech Avicanna, Aras Azadian, said that the federal legalization of medical and recreational cannabis has put Canada in a position to become a global leader in an emerging industry and provide Canadian firms with significant opportunities in a worldwide industry that they’re largely funding.

In becoming one of the first countries in the world to embrace recreational and medical cannabis, Canada can become a model for other nations to follow. Furthermore, one can expect tourism to rise because of the legalization. In the past, legalized cannabis has been a major selling point for tourism in the Netherlands.

Jeff Siegel, the managing editor of Green Chip Stocks, says that legalization will jumpstart job creation as it boosts local economies. Both public and private-owned retailers like Starbuds across the country will create more jobs. But that’s only the tip of the iceberg. There should also be more jobs in production, distribution, marketing, and investment. Cannabis companies like Starbuds are defining how cannabis is sold, marketed, and branded.

Nevertheless, competition is going to be fierce. Brick and mortar stores will face competition from mail order delivery services, and both camps will still be facing competition from the black market. There is still a very strong and established black market in Canada. Supply struggles in the early days of legalization proved that the industry has a long way to come before eliminating the black market.

Canadians will be keen to see how the government reports on sales data. Two-thirds of regular cannabis users did not spend money on cannabis in the last two months. Will cannabis users be more comfortable buying their own product now that it is legal for them to do so? Will the consumption of cannabis increase, and will new users arise?

These questions are yet to be answered but they will determine how big of an impact cannabis legalization will have on the Canadian economy. As of now, consumers and businesses are betting on the “green rush,” but long-term answers are still a long way off.