Cannabis Legalization in Canada: “A great start, with more to come,” says Deloitte

In 2007 the Veterans Affairs Canada decided to reimburse a war veteran for his therapeutic use of cannabis. Today the Government of Canada reimburses more than 17 war veterans for cannabis treatment who suffer from post-traumatic stress disorder. Contribution of medical cannabis represents an increasing cost to Canada. Next year, the amount could reach 200 million Canadian dollars (153 million euros), but this does not seem to be a problem for the government. Legal cannabis sales contributed over 43 billion Canadian dollars to Canada's gross domestic product (GDP), plus 13 billion to Ontario's GDP (33 and 10 billion euros, respectively). But not everything is rosy: the costs to the environment and society also have to be considered.

Since legalizing cannabis, Canada has surpassed more than 11 billion Canadian dollars (8.4 billion euros) in retail sales in the adult-use market and maintains more than 90 jobs annually in the industry, according to an analysis. economic published by the consultant Deloitte Canada. (See the full version at the end of this article).

According to Deloitte, “During the Canadian fiscal year 2021-2022, 17.495 war veterans received a total of 115.942,159 Canadian dollars (€88.9 million) in government funding to purchase 14.527,631 grams of cannabis. (14.5 tons). Statistics Canada also estimates that the investment in the treatment of these citizens will reach more than 200 million Canadian dollars (approximately 153 million euros), according to the Canada's Department for Veterans Affairs.

Revenue vastly outweighs public health costs
Government costs for veterans alone are up 30% from last year and 135% from 2019, but the cannabis sector has also been responsible.
for huge tax revenues for the government, notably in terms of indirect tax revenues.

According to Deloitte's analysis, tax revenue generated by the cannabis industry ends up flowing back to Canadian citizens as federal, provincial and municipal governments reinvest in programs that benefit their communities.

Overall, Deloitte estimates that the cannabis industry accounted for 15,1 billion Canadian dollars (11.6 billion euros) of tax revenue for the Government of Canada and XNUMX billion for Ontario.

Canada's fiscal year runs from April 1st to March 31st of the following year, and the numbers stun any country considering investing in public health or fully legalizing cannabis: Canadian legal cannabis sales have exceeded $766,6 billion. Canadians (about €2020 million) as early as 11, shortly after the legalization of adult use. Currently, Deloitte estimates that 8.4 billion Canadian dollars (67.8 billion euros), 90% comes from retail sales in the adult use market. More than 43 jobs are maintained annually by the cannabis industry. The same consultant mentions in her analysis that cannabis is already making a considerable contribution to Canada's economy, having generated over XNUMX billion Canadian dollars in the country's GDP – Gross Domestic Product.

The industry also made considerable capital investments as companies established themselves and prepared for continued growth by investing in real estate, infrastructure and technology. Capital expenditure between 2018 and 2021 totaled $29 billion in Canada and $9,2 billion in Ontario, largely due to the initial construction of production facilities.

Edibles and topical use skyrocket
According to reports from Statistics Canada, cannabis flower sales represent 58% of total sales, with 9.691.274 packaged units sold, but the fastest growing market was edibles. The “edibles” already represent 24% of total sales in the country, with 3.999.801 packaged units sold (data from December 2021). In the same period of 2019, 812,793 were sold. On the other hand, sales of cannabis extracts represent 17% of total sales, with 2.874.370 packaged units sold. Topical use has also skyrocketed in Canada. If in February 2020 3.170 units had been sold, that number rose to 65,880 in December 2021.

The social and environmental risks of a promising industry

From the data advanced by the Statistics Canada, Deloitte's analysis also looked at the social and environmental risks that the industry can pose, noting that the cannabis industry still has a lot of work to do in order to accurately reflect Canadian society and lessen its impact on the environment . “It should invest in efforts to improve diversity, equity and inclusion”, warns the analysis, which also reveals that the cannabis sector produced around 5,8 to 6,4 million kilograms of plastic waste between 2018 and 2019. Deloitte also draws attention to energy issues, efficient water management and air quality:

The study also highlights concerns about the conscious use of water, air quality, energy costs, pollution caused by lights or recycling of materials used for packages of cannabis derivatives, something the industry must pay attention to. seriously look into if it wants to be sustainable.

Read Deloitte's full review here: