REPORT: Legal marijuana would be a $10 billion industry for Canada

Wednesday, February 17, 2016 by: Sarah Landers
Tags: Canada, legal marijuana, profits

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(NaturalNews) According to the latest report by CIBC World Markets, legalizing marijuana in Canada could create a $10 billion a year industry. Whilst it's understandably difficult to get real data on marijuana use, a survey by Statistics Canada suggests that 12% of Canadians have admitted to smoking pot.

In British Columbia, marijuana consumption is estimated at being a $400 million industry, and if those figures are applied to the Canadian population of pot smokers, the industry would be around the $3 billion mark.

Experts predict, however, that by using Colorado's legalization experience as a model, the market could be much larger than that.

Legalization in Colorado

In Colorado, in 2014, the spending on marijuana totaled $700 million, which also yielded sales tax and licensing revenues of $75 million. It is predicted that this year pot sales will reach $1 billion.

Whilst it is possible that Colorado's data is skewed by tourist buyers – who are literally just visiting the state to legally buy pot – if you adjust this number to Canadian dollars and examine the population figures, the industry could be worth $10 billion.

There are reports that crime rates have dropped since the legalization of marijuana in Colorado – with both burglaries and robberies decreasing between 1 and 10% over the past three years. It is too soon to say that this is a downward trend, however the legalization of pot is considered to play some part in these figures.

Legalization in Canada

It is thought that of the potential $10 billion made from the pot market, the Canadian government could take in a share of more than 50%, depending upon the level of "sin tax" that is applied – which is currently high on products like alcohol and tobacco.

A campaign by Liberal in Canada states that the current system of marijuana prohibition in the country does not work, as it totally prevents young people from smoking pot and too many end up with criminal records – some just for possessing small amounts of the drug.

The cost of arresting and prosecuting Canadians for these offenses is extremely expensive for the criminal justice system, with all the proceeds from the illegal drug trade supporting organized crime and threats to public safety – such as human trafficking and hard drugs.

Liberal suggests removing marijuana consumption and incidental possession from the existing Criminal Code, whilst introducing new, stronger laws that severely punish those who provide the drug to minors, operate a vehicle under the influence, or sell outside the proposed regulatory framework.

The plan is to create a federal task force and design a new system of strict marijuana sales and distribution, under the advice and guidance of experts in public health, substance abuse and law enforcement.

A combination of a proposal such as this one from Liberal, with the Colorado model, could not only save money on arresting and persecuting Canadians for small amounts of marijuana use, but generate an income that simply cannot be ignored.

On the one hand, it is worth noting that the predicted revenues would only be achieved if underground sales of marijuana are effectively extinguished; 70% of pot currently grown isn't sold domestically so would not be taxable. But on the other, the income that can be made from the legalization of pot, and the impact it will have on government funds, is worth considering.

Sources include:

1. VancityBuzz.com

2. TheCannabist.co

3. Liberal.ca