Canada: The cannabis industry has generated 15 billion $CA in taxes and 151,000 jobs since legalization

Despite the challenges facing Canada's largest cannabis companies, its legal industry has had a significant economic impact since cannabis was legalized in 2018, according to a new report published today by Deloitte.

According to Deloitte, the cannabis sector has generated more than 15 billion $CA in direct and indirect tax revenues for Canadian and provincial governments, while creating more than 151,000 jobs since Canada legalized cannabis for adults in October 2018.

Although Statistics Canada and Health Canada regularly publish data on sales and’impact of cannabis in the country, Deloitte's report takes a closer look at tax revenues and the job market since legalization.

All in all, the’Canada's cannabis industry has contributed 43.5 billion $CA to the country's economy between legalization and 2021, according to Deloitte. The industry invested around 4.4 billion $CA directly in the economy, while 29.3 billion $CA came from «indirect» economic contributions and 9.8 billion $CA from «induced» contributions, according to the report.

«Our hope with this report is that people realize that the industry has done much more than simply provide [licensed producers] with $4 billion in retail access,» said Rishi Gautam, a partner at Deloitte who leads the consulting firm's cannabis practice. «It has filled government coffers and been a boon to the construction industry.».

Deloitte defines indirect economic contributions as activity generated in other sectors, such as construction. gigantic greenhouses, Induced economic contributions are defined as consumer spending resulting from the wages earned by cannabis jobs.

The report points out that the indirect economic impacts have been modeled as being greater than its direct economic contributions «due to the significant capital expenditure in activities related to construction and modernization.»

11 billion $CA of cannabis purchased in 3 years

Since 2018, Canadians bought 11 billion $CA worth of cannabis, The companies responsible for the production and sale of legal cannabis invested 29 billion $CA during this period, according to Deloitte. Of the tax revenue generated, around 1 billion $CA came from direct contributions to government revenue, while another 2.9 billion $CA came from sales and excise taxes. The remaining 11.2 billion $CA came from indirect and induced tax sources.

The report shows that more than 43,479 people are directly employed in the cannabis industry, while another 88,595 people have indirectly found employment thanks to the legal cannabis sector. He adds that for every million dollars of revenue or capital expenditure, the cannabis sector supports around four jobs in Canada.

«We've read a lot about the volatility of employment in the cannabis sector,» said rishi Gautam. «There was this period in Canada where it seemed like every [licensed producer] was laying people off, which was factored into these numbers.»

The report also highlighted the lack of diversity seen in the Canadian cannabis industry, and revisited a University of Toronto study that found 72 % of the industry's executives and directors identify as Caucasian males, while only 16 % identify as racialized.

The study also highlighted the environmental impact of the cannabis industry, with 5,184 kilograms of carbon emissions released into the atmosphere for every kilogram of dried flower produced. In addition, between 5.8 million and 6.4 million kilograms of cannabis packaging were sent to landfill between 2018 and 2019 alone, according to the report.