A flourishing pot market

A flourishing pot market

The number of cannabis users in Canada is estimated at 4.9 million people.

Canadians consumed as much as $6.2 billion of marijuana in 2015, which was almost as much as they spent on wine, the federal statistics agency said as it gears up to officially track weed when it becomes legal next year.

The agency calculated the value by estimating that 4.9 million people consumed 698 metric tons of cannabis that year at an assumed price range of between $7.14 and $8.84 per gram. It used government health and social surveys and outside research to create its model.

Marijuana could be legal for adults in Canada by summer 2018. Credit: Randy Risling/Toronto Star/Getty.

Canada’s finance ministers struck a deal on how they plan to share tax revenues during the cost-heavy start-up phase of a legalized marijuana market — but they also kept their options open, just in case lucrative days lie ahead.

The new agreement will see the federal government give the provinces and territories a 75% share of federal excise tax revenues from the sale of legalized pot, a portion of which will be meted out to cities and towns to help them meet the cost of making cannabis legal across Canada.

Ottawa, which intends to legalize recreational cannabis in July, will retain the remaining 25% share up to a maximum of $100 million a year with any income over and above that limit going to the provinces and territories.

Annual consumption of cannabis on the rise

Statistics Canada named the report Experimental Estimates of Cannabis Consumption in Canada, 1960 to 2015 and admitted there is “currently no systematic process” for measuring usage. The agency warned its estimate for the market is very rough and actual consumption could “reasonably” be as low as half or as much as double as the amount reported.

Some 698 million metric tons of cannabis may have been consumed in Canada.

Nevertheless, annual consumption appears to be one-half to two-thirds the size of the $9.2 billion beer market, or almost as much as the $7 billion wine market, the agency reported.

Prime Minister Justin Trudeau has committed to full legalization of recreational use by July next year, a move that’s created a surge in the share prices of producers. Authorities have stated that even as they aim to keep taxes on legal weed low to squeeze out criminal dealers, the new market may generate $400 million a year in revenue.

Eric Paul, CannTrust Holdings Inc. Chief Executive Officer, said that while it may take three years for the legalized market to reach its full potential, he is already expanding his greenhouse space to take advantage of the potential. “The near term challenge will be sufficient supply to meet the government demand,” he said to the newspaper The Toronto Star.