Canada: Recreational cannabis industry could top $22 billion $

Sales of legal recreational cannabis could create a $22.6 billion industry in Canada, eclipsing sales of beer, wine and spirits combined, according to a new study.

The Deloitte report, entitled «Cannabis récréatif: Notions et Opportunités», concludes that the legalizing cannabis in Canada next year, initiated by Justin Trudeau, could shake up the Canadian economy.

«There hasn't been anything like this since the development of the Internet,» said Mark Whitmore, vice-president of Deloitte, in an interview.

«We have that feeling. There's a lot of noise, a lot of interest around what's going on, and a lot of people think it's going to be an opportunity,» says Whitmore.

Deloitte estimates that satisfying the recreational cannabis market will mean producing 600,000 kilos of cannabis a year, far more than the 36 farmers authorized to grow cannabis for medicinal purposes.

However, the consulting firm warns of the challenges that recreational cannabis will pose.

«Of course, there are practical considerations to take into account when cannabis prices are set, which go beyond what the market is willing to pay. The challenge will be to set a price that balances the objective of creating and sustaining a legitimate market (by eliminating criminal enterprises) with that of not inciting consumption.».

For its study, Deloitte surveyed 5,000 Canadians over the summer, 1,000 of whom were identified cannabis consumers, and calculated that basic cannabis sales alone could be worth between $4.9 billion and $8.7 billion a year.

With the combined revenues from tourism, business taxes, licensing fees and paraphernalia (consumer accessories), Deloitte estimates that the market could reach $22.7 billion.

The study did not take into account potential cannabis-related jobs created.

«When we look at this recreational market, it could be a significant opportunity for Canadian business and government,» says Whitmore.

The Trudeau government, and more specifically a expert panel to study the legalization of cannabis, is to submit its legalization plan on November 30, with a view to introducing the law in early 2017.