Cannabis Growers of Canada Show Economic Impact of Craft Cannabis Industry

The Cannabis Growers of Canada are pushing a white paper to government officials across the country in an attempt to let decision makers know the economic impact of the industry.

Cannabis Growers of Canada director of outreach Jaclynn Pehota said the group has sent the document,The Cannabis Market in Canada and British Columbiato federal, provincial and civic leaders.

The paper stresses to government that the information it provides about jobs is real and the public needs to understand the lost economic impact if policy makers force out the craft cannabis industry.

The document forecasts that, by 2036, the cannabis market in Canada could be worth anywhere from $9 billion to over $18 billion on the high end of the range.

The paper says that Canada’s current cannabis market is currently driven by British Columbia.

“Given its illegality, the exact size of BC’s cannabis market cannot easily be estimated. However, most estimates range between $2 billion and $7 billion,” the paper states. “The domestic component represents around 10 per cent of the total industry: out of a market worth roughly $4 billion in 2012, approximately $407 million was consumed by BC residents.”

It’s estimated that, accounting for inflation and population growth, BC use of cannabis in 2016 is around $440 million, with 392,422 users in the province.

The Cannabis Growers of Canada are pushing a white paper to government officials across the country in an attempt to let decision makers know the economic impact of the industry.
Currently, taxes account for approximately 30.8% of Canadian GDP. If such a rate were applied to the legalized cannabis market, it would lead to growing annual tax revenues that would start at $1.54 billion and reach approximately $3.08 billion over the next two decades.

The paper says that, due to the market currently being illegal, estimating the number of those employed by the cannabis industry in B.C. is difficult. Using numbers in Colorado, the CGC estimated that over 13,700 people are currently working in cannabis in the province with annual wages totalling $618.1 million.

The Cannabis Growers of Canada state that most of the profits from the industry are currently being lost to the government and recommend that if the market was taxed at a regular taxation rate it could generate annual tax revenues of $1.54 billion.

The paper recommends that government not impose high level “sin-tax” on cannabis, pointing that the BC government’s mark-up of 124 per cent on spirits and 89 per cent on wine won’t work with cannabis.

“As the cannabis market currently operates illegally, significantly increasing prices would undermine efforts to transition illegal activities into regulated, legalized ones,” the paper states. “As such, initial markups should not have revenue raising as a first priority; rather, the priority at the initial time of legalization should be to starve the illegal market of cash flows, so that all illegal activity is eventually transitioned into the desirable regulated market.”

Pehota said the response has been excellent so far, noting that the Ottawa municipal government as well as agriculture ministries have been especially receptive.

“We want agricultural to really get involved with cannabis as an agricultural product,” she said. “As opposed to just leaving it in the hands of the treasury, or health or harm reduction, we want people to really start considering cannabis as an agricultural commodity.”

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