A U.S. consultant hired to assess Canada’s adult-use cannabis market estimates that jurisdictions that allow legal sales should see “unbelievably high” sales growth in the first few years of the legal regime, the Canadian Press reports.
Adam Orens, a co-founder of the Marijuana Policy Group, said the firm is not yet at liberty to discuss Canada’s potential market because of a contract agreement with Health Canada, but according to the group’s research in Colorado, sales grew 42.4 percent in the state between 2014 and 2015 – when sales reached $996 million, prompting $2.4 billion in economic activity, $21 million in state tax revenues, and creating 18,000 new full-time jobs.
“This is a conversion of an existing, informal market into a formal, regulated market and you’re going to see several years of very fast growth,” Orens said in the report, referencing Colorado’s migration.
The group estimated that Colorado’s sales would slow as the program matures and illegal sales dwindle, projecting 13.1 percent sales growth in 2020.
Canada’s Parliamentary Budget Office has estimated cannabis sales tax revenues could be between $356 million and $959 million by 2018, assuming retail cannabis sells for $9 a gram – the current illicit market price in Canada. C.D. Howe Institute, a public policy think tank, estimated that Canada’s legal cannabis industry would generate about $675 million in federal and provincial tax revenues in the first year of legal sales.