Canadian cannabis legalization effective in combating illicit market, say researchers

Seven years after the legalization of cannabis in Canada, new research confirms that politics has succeeded in displacing a large part of the illegal cannabis market to the legal market.

The study, published in the’International Journal of Drug Policy by researchers from Peter Boris Centre for Addictions Research and St. Joseph's Healthcare Hamilton, provides one of the most comprehensive overviews to date of the evolution of the cannabis landscape in Canada since legalization in late 2018.

Legal cannabis sales capture 72 % of the market

According to federal surveys cited in the document, legal adult-use cannabis accounted for 72% of all cannabis sales in Canada five years after legalization. This is a radical change from the pre-legalization market, where 88.2 % of cannabis sales were illicit. At the time, the medical marijuana represented only 11,8 % of the market.

By 2023, the share of medical marijuana was only 3,4 %, while sales of illegal cannabis were down to 24.4 %. The researchers note that while these figures involve a degree of uncertainty due to the nature of the data reported, the trend is clear: legal cannabis is now the dominant force in Canada's cannabis economy.

«The legalization of recreational cannabis in Canada appears to be achieving one of its main objectives by supplanting the illegal cannabis market,» the study concludes.

Evolution of cannabis sales in Canada

One of the least expected consequences of legalization has been the erosion in the medical cannabis sector. Prior to 2018, patients sought cannabis through regulated medical channels, often under the guidance of a physician. But five years on, this market has shrunk considerably.

The researchers point out that this reduction raises questions about the decline in clinical monitoring, The concern is not necessarily about safety - legal products remain regulated - but rather about the safety of the products themselves. The concern is not necessarily about safety - legal products remain regulated - but rather about the loss of therapeutic follow-up for those who use cannabis for medical purposes.

A 75 % increase in national spending on cannabis

Perhaps the most controversial finding of the study is the sharp rise in cannabis-related spending. Canadians now spend 75% more on cannabis than before legalization. While this may suggest a boom in consumption, the researchers urge caution in interpreting these data.

Part of the increase may be linked to the consumer price inflation rather than increasing consumption volumes. Legal cannabis products are often sold at higher higher prices than products sold on the street, and the availability of diversified, higher-quality products could explain this change in consumer habits.

Nevertheless, the total expansion of the cannabis market cannot be ignored.

«The overall cannabis market in Canada grew substantially in the first five years of legalization, suggesting that consumption increased at the population level,» the authors write.

Despite the fears expressed in the run-up to legalization, the study finds that no clear evidence of increased consumption cannabis use among young people. In fact, some surveys suggest the opposite, a lower cannabis consumption among young people. Similarly, the problematic use or dependence have not increased significantly.

«Continued population-level monitoring of cannabis use is needed to ensure that the increases observed in this study do not contribute to an increased burden of cannabis-related harm in Canada,» the authors warn.

In the end, the study paints a balanced picture of legalizing cannabis in Canada. On the one hand, it has reduced the black market and to offer consumers regulated, safer alternatives. It has also contributed to the’booming cannabis economy but with a decline medical cannabis and the associated risks.