Canada’s Cannabis Success One Year After Legalisation

17th October 2019

Today marks the introduction of Cannabis 2.0, alongside the one year anniversary of Canada’s Cannabis legalisation. So, how has the legislation affected the country so far?

On October 17th, 2018, the Canadian government formally legalised adult-use of recreational Cannabis. The change in law has undoubtedly had some effects on the economy, the black market, and the consumer, but to what extent have these effects been positive?

The Economy

Since the law change, one year ago, the new Cannabis sector is thought to have contributed C$8.26 billion (approx. £4.89 billion) to the country’s economy. This is a huge amount of revenue – however, it is not as much as was predicted. Despite this, it has presented the opportunity to take this revenue out of the hands of underground dealers.

The Cannabis sector has also brought around 9,200 new jobs to Canadians. According to a study by Statistics Canada, the number of jobs in the sector quadrupled in the year ending August, 2019.

However, the market has not been as successful as many analysts and entrepreneurs had first hoped. Many, large and small, cannabis companies posted significant losses in the first year of legalisation.

Canada’s Cannabis Black Market

One of the key arguments for Cannabis legalisation and regulation, around the world, is the need to take the drug out of the hands of ‘criminals’. The theory is that most people, when given the choice, will choose to source their Cannabis from legal sources. But the extent to which this has been true in Canada is yet to be determined.

Some surveys have suggested that, although many Canadians have switched to licensed suppliers, the illegal market is still flourishing. The slow development of retail outlets and the high price of licensed products may be a significant contributing factor to this problem.

Having said this, the supply problem has seen a slow improvement throughout the year. The price of federally-licensed Cannabis has also been falling. However, black market suppliers have been lowering the price of their products to reflect this. According to Statistics Canada, black market Cannabis currently costs almost 50% less than Cannabis from licensed suppliers.

Cannabis Health and Research

Studies have shown that Cannabis consumers prefer strains with a high percentage of – ‘high’-inducing – THC. These strains are most commonly available through the black market, as legal regulators attempt to push a safer product.

Although many consumers may continue to source high-THC strains, the new regulations should be credited for bringing a safer product to the table.

There is little doubt that the 100+ years of prohibition of Cannabis severely halted research into the plant’s potential. However, having legalised medical Cannabis in 2001, Canada has seemingly had a head start in developing an understanding of the plant.

Further legalisation is also thought to improve access to the drug, making research and clinical trials less difficult to carry out.

In this time, much more has been learned about the medical applications of Cannabis. In fact, the medicinal use of the plant has seen a 4,000% increase since 2014.

The Canadian government has also invested in a number of research programmes, aimed at understanding the social and health implications of Cannabis use. This includes the Integrated Cannabis Research Strategy (ICRS), launched by the Canadian Institute of Health Research.

The Integrated Cannabis Research strategy aims to:

  • Increase access to evidence-based research
  • Meaningfully engage Indigenous Peoples in the research process
  • Promote open data sharing
  • Establish evidence for the medicinal use of cannabis.

Cannabis 2.0 and the Future of Canadian Cannabis

So far, the Canadian Cannabis experiment has proved to be a mixed bag of results. A muddle of clear benefits and further potential, alongside some undeniable shortcomings.

However, it is important to remember that Canada is only the second country in the world to legalise Cannabis. Some teething problems are to be expected when building a regulated sector from scratch.

But what do experts expect for the future?

Having decided to hold back on permitting the sale of Cannabis extracts, topicals, and edibles for a year, today marks the coming of Canada’s Cannabis 2.0.

The new market is expected to help towards the growth of the Cannabis sector (a study by Deloitte has found that the market for alternative Cannabis products could be worth C$2.7 billion)

The second wave of legalisation may also help with the quashing of Canada’s Cannabis black market. However, it may not help to decrease, and may even increase, the number of consumers.


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