CANADA’s ganja sector has generated more than C$15 billion in direct and indirect taxes and created over 151,000 jobs, since that country decided to legalise recreational use of the plant in October 2018, according to a report released earlier this week.
The report released by Deloitte Canada, a multinational professional services firm, and provincial pot distributor, the Ontario Cannabis Store, said for every dollar in revenue or capital expenditures, the industry adds about C$1.09 to Canada’s gross domestic product (GDP) and C$1.02 to Ontario’s from legal purchases.
While Statistics Canada and Health Canada regularly release economic and sales data, the Deloitte report offers the most comprehensive look at how the industry has impacted tax revenue and the labour market since legalisation.
According to the Deloitte report, Canada’s ganja industry has contributed C$43.5 billion to the country’s economy in the three years since legalisation, between 2018 and 2021. The industry has directly invested roughly C$4.4 billion in the economy, while C$29.3 billion was sourced from “indirect” economic contributions, and C$9.8 billion in “induced” contributions, the report said.
“Our hope with this report is that people would realise that the industry’s done a lot more than simply provide [licensed producers] with C$4 billion of retail access,” said Rishi Malkani, a partner at Deloitte who heads the consultancy’s Canadian cannabis practice, in an interview with BNN Bloomberg. “It’s loaded government coffers and it’s been a boon to the construction industry.”
For the fiscal year ending July 2021, the Canadian ganja sector contributed C$17 billion to that country’s GDP. Unlike beer (C$9.3 billion sales) or wine (C$8 billion sales), all adult-use cannabis sold in Canada is produced in Canada, magnifying the impact of ganja on the country’s GDP.
“When you talk to them and you let them know that the GDP contribution right now is comparable to auto manufacturing, or to life sciences or even to dairy, when you show them those statistics they’re quite taken aback,” Khan continued in his BNN Bloomberg interview.
Since 2018, Canadians have purchased C$11 billion worth of cannabis, while the companies responsible for the production and sale of legal pot have spent C$29 billion in capital expenditures during that time, Deloitte said. Of the tax revenue generated, about C$1 billion came from direct contributions to government revenue, while another C$2.9 billion was sourced from sales and excise taxes. The remaining C$11.2 billion was modelled from both indirect and induced tax sources.
Malkani said one of the main data points that leapt out to him was the level of employment the industry has been able to sustain despite the layoffs cannabis companies have conducted as a result of building too much cultivation supply that overshot demand in the Canadian market.
An analysis from trade publication MJBizDaily found that at least 6,000 people employed at 20 Canadian pot producers lost their jobs in 2020.
The report also shed light on the lack of diversity seen in Canada’s cannabis industry and re-examined a study by the University of Toronto that found that 72 per cent of executives and directors in the sector identify as caucasian males, while only 16 per cent identify as racialised individuals.
It also highlighted the environmental impact that the cannabis industry bears, with 5,184 kilogrammes of carbon emissions being expelled into the atmosphere for every kilogramme of dried flower produced. As well, between 5.8 million to 6.4 million kilogrammes of ganja packaging were sent to landfills from 2018 to 2019 alone, the report said.
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