We’re almost two months into legalization in Canada, and the demand for recreational cannabis remains high. At the same time, there’s plenty of opportunity for growth and increased revenues. As investors continue to funnel funds into stocks and new Canadian cannabis companies to meet this demand, many are questioning just how big Canada’s legal cannabis market will be.
As it stands, Canada is already the world’s largest federally-legal cannabis market. Now, this is mainly because Canada is the largest country to have legalized recreational cannabis sales. As of writing, only Uruguay and North Korea allow for recreational cannabis sales.
In the U.S., however, individual U.S. states such as Colorado, California, Oregon, and Washington have legalized recreational sales. Colorado, which was the first state to legalize cannabis in 2014, has made over $1.46 billion CAD in sales so far this year. Washington is nearing the billion dollar mark, and California, which has a population size similar to that of Canada, has seen over $3.5 billion CAD in sales.
So where will this leave Canada?
Of the world’s ten biggest cannabis companies, nine are based in Canada. It’s clear that Canada has a lot to offer the world when it comes not just to cannabis-based products, but knowledge. Thanks to the country’s long-running medical cannabis program and its burgeoning recreational market, many countries are keeping an eye on Canada’s cannabis industry to see how they too can venture into medical or recreational cannabis sales (and subsequent taxation). This has helped fuel some exciting growth estimates for the country’s cannabis industry.
Canadian Cannabis Industry Growth Estimates
How large Canada’s adult-use cannabis market will become depends on who you ask and how far into the future you look. Here are a few estimates we’ve found eye-opening:
- To start, it is predicted that Canada will rake in $900 million in sales, and grow quickly. That number is based on the government’s projections that they will see 450,000 customers a day purchasing legal Canadian cannabis. However, on the first day of legalization, Ontario’s online store alone had 100,000 orders, already outpacing the government’s predictions. Other provinces saw their stores sell out of stock and many dispensaries have empty shelves as producers continue working hard to increase their growth capabilities will meeting Health Canada regulations.
- Arcview Market Research, leading researchers in the cannabis space, predict that adult-use cannabis will grow to over $3 billion CAD in 2021.
- Canadian bank CIBC is of the mind that cannabis will be a $6.8 billion CAD industry by 2020—which is just around the corner.
- Deloitte spies even more growth, predicting $8.7 billion CAD in sales and an amazing economic impact of $22.6 billion CAD.
- Other researchers see legal cannabis growing to be on-par with alcohol sales between $4.9 to $8.7 billion CAD.
The Problem with Cannabis Industry Estimates
Trying to measure the growth of an industry that to some extent blossomed from black market sales is difficult. Researchers are basing their estimates on reported use and black market sales estimates that may not be accurate. In addition, U.S. sales are often looked at to determine growth potential, however, looking towards Colorado or California won’t necessarily provide a realistic portrait of the cannabis industry’s potential in Canada—mainly because, in the U.S., cannabis is still illegal at the federal level. States such as Colorado, California, and Washington that allow for recreational sales have to function within an entirely different system than the one Canada has in place. With years of legal medical marijuana and a better framework, Canada is poised to make an indelible mark.
In addition, many of the above figures were provided before legal sales began. Even taking into account current sales figures would not provide an accurate picture of the potential growth of the cannabis market because there has been a distinct lack of supply—had more cannabis been available at the onset of legalization, there’s no doubt sales figures would have been higher.
So just how big will the Canadian recreational cannabis market become? While estimates vary, there’s one thing they all have in common: spectacular growth potential that impacts numerous sectors. In addition to potential sales upward of $8 billion CAD, the cannabis industry will likely impact both the agriculture and the tourism industry, among others. We’re quite excited to watch it grow!