Canada’s Booming Pre-Legalization Marijuana Market
The billions and the billions, they keep coming.
Canada’s appetite for cannabis has more than tripled since the early 1990s, a dramatic shift in consumption habits that precedes the country’s experiment with marijuana legalization.
Long more lenient with cannabis than their more conservative neighbors to the south, Canadians have been able to access legal medical marijuana in some form since 2000.
Beginning in 2013, commercially produced cannabis has been available from companies with licenses from Health Canada, the country’s public health department — and sometime next summer, recreational cannabis will be available for all adults in licensed storefronts.
According to an official report from Statistics Canada released on Dec. 18, in 2015, 4.9 million Canadians consumed as much as 698 metric tons of marijuana, or $6.2 billion worth of product, in Canadian dollars.
That estimate was arrived at based on user data gleaned from government health surveys, the same method American scientists and health experts rely on to gauge use in America. The report’s authors caution that theirs is but a rough estimate, and the real number could “reasonably” be “as low as half or as much as double,” as Bloomberg noted.
Nonetheless, assuming a price range of between $7 and $9 a gram, the Canadian marijuana market would be an estimated size of $4.8 billion dollars or thereabouts ($6.2 billion in Canadian dollars).
This estimation would make the Canadian marijuana market big enough to be mentioned in the same breath as the country’s penchant for beer ($9.2 billion Canadian dollars) and wine ($7 billion Canadian dollars).
Investors are noticing the size of Canada’s marijuana industry. In November, mega-brewer Constellation Brands, holder of trademarks including Corona, invested $191 million dollars in Canopy Growth, one of the cannabis companies with licenses from Health Canada. Canopy Growth is valued at around $2 billion dollars, in large part because of the stupendous value that potential investors see in the country’s impending legalization. (Disclaimer: This reporter owns a very small amount of stock in Canopy Growth.)
And as per the report from Statistics Canada, there’s already a sizable market well ahead of legalization — as well as some possible room for more growth.
For context’s sake, at roughly 37 million people, Canada’s population is slightly smaller than California’s. According to an estimate prepared for the Golden State in August, Californians consume 3.5 million pounds of cannabis a year, or more than twice Canada’s habit.
Another takeaway from the report: Youth use appears to be on the decline in Canada. People aged 15 to 17 constitute about 6 percent of cannabis consumers in the country, after years of steady decline even as other users of other ages ramped up their habits.
Almost half of Canadian cannabis is consumed by users aged between 25 and 44 — though there’s some mixing of generations. Young adults aged 18 to 24 use roughly as much cannabis as their parents’ generation between 45 and 64.
TELL US, do you think the size of Canada’s marijuana market will grow?