Legal cannabis is going to take Canadian commerce by storm, if experts at major Canadian banks are correct in their forecasting.
In a report released this week, the Canadian Imperial Bank of Commerce predicts Canada’s appetite for legal marijuana will match its appetite for wine and exceed its appetite for spirits by 2020.
While the federal government has adjusted its original July 2018 timeline for legalization in order to consult with Indigenous communities about sharing revenue from cannabis sales, Prime Minister Justin Trudeau recently vowed cannabis will be legal by this summer.
In the two years following legalization, the bank estimates Canadians will consume 800,000 kilograms of cannabis, almost all of which will be of the recreational variety.
“We believe that by 2020, the legal market for adult-use cannabis will approach $6.5 billion in retail sales,” CIBC said. “For context, this is greater than the amount of spirits sold in this country.”
The bank looked to U.S. states Colorado and Washington — where marijuana is already legal — to try and predict the trajectory legal marijuana sales will take in Canada.
Their research showed that legal cannabis sales have grown in Colorado by a compound annual growth rate of 30 per cent since sales began in 2014. That, CIBC points out, is a hearty growth rate.
The bank says the case is similar in Washington, despite the fact that sales there were sluggish in the first year due to regulatory setbacks, unprepared municipalities, a complicated tax structure, and high prices.
“To put this in perspective, the combined populations of Washington and Colorado are less than that of Ontario,” the report says. “Yet these two states combine for nearly $3 billion in sales, and over $650 million of annual revenue from taxes, licences and fees.”
As legalization day approaches, both government and industry have set to work profiling Canada’s major marijuana consumers for the sake of policy development and marketing. Statistics Canada identified in 2012 that 49.4 per cent of males and 35.8 per cent of females 15 years old and older in Canada had consumed marijuana, and that most of the people who consumed it were between the ages of 25 and 44.
The federal agency has also determined that Canadians in the Territories pay the most for medical and non-medical marijuana, at $9.51 per gram, while those in Quebec pay the least, at $5.86 per gram.
As part of a survey of marijuana users in North America, media website Civilized.life partnered with PSB Research and collected demographical information about users in each country. Their data — presented in the infographic above — paints a slightly different picture of the average Canadian cannabis smoker from that of Statistics Canada.
While different demographic studies yield slightly different results and data on demographics is likely to change once cannabis becomes legal, the broad view remains the same.
“There seems to be just one conclusion that most everyone can agree on,” the CIBC report says. “Witnessing the development of this industry will be fascinating to watch.”