Cannabis Market in North America
Legal cannabis sales reached almost $10 billion in North America in 2017, according to a new report from cannabis industry analysts Arcview Market Research, in partnership with BDS Analytics. That represents an unprecedented 33% increase over 2016. New cannabis industry report also predicts the entire legal cannabis market to reach $24.5 billion in sales – a 28% annual growth rate by 2021.
The industry employed 121,000 people in 2017. If cannabis continues its growth trajectory, the number of workers in that field could reach 292,000 by 2021, according to BDS Analytics.
Canadian cannabis market has been steadily growing. The country has seen an average of a 10 percent increase each month in the number of Canadian patients signed up to receive medical cannabis. The sale of dried cannabis has grown steadily at 6 percent a month, and the sale of cannabis oil has been growing by 16 percent a month.
In 2017, about 4.9 million Canadians aged 15 to 64 spent an estimated $5.7 billion on cannabis for medical and non-medical purposes. This was equivalent to around $1,200 per cannabis consumer.
Canadian Cannabis Market Forecast
The current expectation for a launch of recreational cannabis sales in Canada in July 2018 is that the initial market demand would be 441,000 pounds.
The Canadian government projects that 450,000 customers a day would participate in Canadians cannabis market, making recreational cannabis in Canada a $900 million industry. The Canadian marijuana market also is expected to see rapid growth, with the number of cannabis users growing by more than a half million people within the first three years of legal cannabis sales in the country. It’s expected that 98 percent of all cannabis sales would come from Canadians who would consumer cannabis at least once per week, if not daily.
Leading cannabis industry researchers, ArcView Market Research expect Canada’s thriving medical market to peak in 2018 and start to descend in 2019 once the adult-use market is fully operational. Growth is forecast to be strong, with adult-use spending estimated to reach over $3 billion in 2021, driving a CAGR of 77.9% from 2018-2021.
Cannabis industry analysts predict that Canada’s cannabis industry ultimately would total between $4.9 and $8.7 billion Canadian. If the market meets prediction, Canada’s legal cannabis market would be comparable in size to its hard liquor or wine market.
The cannabis market is poised to have a major effect overall on Canada’s economy. One study from Deloitte Private pegged the potential economic impact of legalized recreational marijuana in Canada at more than $22 billion, including transportation, licensing fees and security.
The Government of Canada believes that the total of federal and provincial-territorial taxes on cannabis products should not exceed $1.00 per gram, or 10 per cent of the producer’s sale price of a product, and that this tax room should be shared equally between the two orders of government. The proposed federal excise duty rate would be 50 cents per gram of cannabis, or 5 per cent of the producer’s sale price of that product. An additional rate would apply for an agreeing province or territory.
The proposed duty would apply to all cannabis products available for legal sale, including fresh and dried cannabis, cannabis oils, as well as seeds and seedlings for home cultivation. The rate will also apply to the sale of medical cannabis.
It is important to note that excise duties are not paid directly by consumers. Rather, they are paid by manufacturers.
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