Marijuana is on the verge of being legalized in Canada, as the Senate passed the Recreational Marijuana Bill on the 19th of June 2018. However, the actual legalization process may be slightly delayed, and lighting up may only be lawful after September. Of course, the process has not been without its ups and downs, and a veritable storm of controversies. A number of rumbling voices have been heard, both in favour and against the Bill.
But, with legalization now all but a sure thing, attention is instead turning to other aspects of the process. Namely; what exactly legal marijuana could mean for the Canadian economy. Early projections and studies show that legal marijuana could not only match the national revenue of hard spirits, but also surpass it. Canada has always been somewhat ahead of the curve in terms of legalization processes and unlike the USA, have allowed for online casino games to be enjoyed within their borders, much to their benefit. They are now once again breaking the mould, and could well reap the rewards.
Billions In Potential Revenue
In a recent report, business and financial analysts Deloitte gave some rough projections. By their calculations, legalized marijuana could boost the Canadian economy by around $22.6 billion annually. But this was a long-term projection, assuming that the market had stabilised after an initial teething period.
Deloitte clarified that, in the first few years, a far more modest number could be counted on; around $5 billion. This number, however, is still equal to the hard liquor industry, and this is certainly not something to be sneezed at. And, of course, this isn’t even taking into account the anticipated increase in tourism to the country, which would add another few billion to that number.
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However, with all the positive attention the legalization process has garnered, it can often be overlooked that it isn’t all a giant rose garden.
With legalization of marijuana come a number of other issues, including the increase in law enforcement services required to keep things in order. Assumptions are, of course, that the black market will gradually dismantle, but just because marijuana will be legal, it does not mean that regulations will not be required. And that regulation will come with an enormous amount of logistical planning, dedicated departments, and more. This costs money, and the potential taxes enforced on the sale of marijuana could end up being used to police the distribution of it.
Likewise, a serious concern is if the country will be capable of meeting demands, or if it will be necessary to import marijuana from other countries. And as early estimates show, it will be some time before Canada is capable of producing enough marijuana to meet the demands of its own citizens. At least at first. This means accounting for, and keeping track of a wave of new imports into the country, which is no small amount of work.
A View On Imports
Recently, a ground breaking event occurred when MediGrow, a Lesotho based company shipped 850 grams of marijuana to Canada. The stated purpose was for research, but the occurrence drew attention from around the world.
Lesotho was the first African country to legalize marijuana, which made it an obvious solution to many of Canada’s future plans. Supreme Cannabis, a Canadian based company, was quick to invest around $7.7 million, making it apparent that Lesotho would be a first choice when importing was required, soon down the line. So as far as imports are concerned, it seems some Canadian companies are taking the bull by the horns well in advance. But this one source will be far from capable of meeting the demands of an entire country, and there is massive economic growth potential for similar companies that get on board.
The full impact of legalized marijuana on Canada remains to be seen, but no doubt the world will be watching, analysing, and perhaps making plans of its own to follow suit in the near future. Assuming all goes well for Canada that is.