The legalization of cannabis is coming to Canada. The economic impacts of this new market will have broad ripple effects. Tens of thousands of jobs, hundreds of millions of tax dollars and tens of billions of dollars in economic spillover have been undersold by the federal government’s mandate to keep marijuana out of the hands of kids.
Make no mistake, this industry will rapidly become one of the largest in Canada. Provinces like B.C. have much to gain, leveraging a rich cultural history with the plant. That is, if we can capitalize on the opportunity.
Through the 2017 B.C. election cycle, mentions of this new sector have been sparse. The likely combination of polarizing contentiousness and lack of knowledge have kept this multibillion-dollar economic engine off party platforms. This silence is contrary to the activity of other Canadian provinces.
Proactive provinces are mobilizing
New Brunswick has organized a working committee to provide direction on a number of key policy decisions. This group will be comprising public health officials, industry insiders, academics and first-responders. Ontario has been embroiled in a healthy debate over distribution mechanisms for the last six months.
Battle lines have been drawn between eager supply-chain participants from pharmacies, liquor unions and private retailers in Ontario, Quebec, Nova Scotia and Alberta. Our elected officials in B.C. have been silent to date, preferring to hide behind deference to the feds and ‘waiting for further direction.’ With the pronouncement of draft policy now almost a month old, that excuse has worn thin. The capture of new opportunities by proactive provinces has already begun in the medical market — 90 per cent of the production footprint has been snatched by firms in Ontario.
Mismatched supply and demand across provinces
The production statistics tell this story. If the trend of production infrastructure location continues for recreational cannabis, Ontario will be running at a considerable provincial trade surplus relative to population. As it currently stands, Ontario holds 90 per cent of legal production square footage in the Access to Cannabis for Medical Purposes Regulations market.
This isn’t reflective of localized consumption patterns, where cannabis use trends between a 10- to 15-per-cent band of the population across all provinces, with the highest self-reported usage in B.C., Ontario, and Nova Scotia. An estimated 500,000 people in B.C. consume cannabis, and in Ontario that number is closer to 1.3 million. Even accounting for population differential, B.C. is falling behind for production supplying domestic demand.