Dazed and Confused: How Legal Cannabis Will ‘Artificially Boost’ Canada’s Economy

Article by Michael Babad, Globe and Mail

BUSINESS BRIEFING Dazed and confused: How legal cannabis will ‘artificially boost’ Canada’s economy MICHAEL BABAD Briefing highlights Pot to artificially boost GDP A Doug Ford scene I’d love to see Markets at a glance OECD trims Canadian forecast Canopy Rivers set to go public Magna selling auto electronics unit

Legal cannabis is expected to boost the official measure of Canada’s economy. But it’s really a lot of smoke. And some mirrors.
The statisticians won’t be dazed and confused by it all after marijuana becomes legal next month, but others of us might be when we see that economic growth is markedly stronger than it should be.
This is, for example, a big reason why Toronto-Dominion Bank economists raised their forecast for economic growth, even though economic growth won’t really be that much stronger.
They’re not dazed and confused, either, because they know it will be an “accounting illusion” that suddenly makes legal something that had been forbidden fruit.
“We have upgraded our economic growth forecast for 2019 to 2.2 per cent, but we would caution against reading too much enthusiasm into this,” TD economists said in a new projection this week.
“Some of the lift to next year’s growth outlook can be put down to an artificial boost from the government’s legalization of cannabis,” they added.

Read the full article here.

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