Canada spent almost as much on weed as wine in 2015
Canada’s booming cannabis market has grown to such an extent that the country now spends almost as much on recreational marijuana as it does on wine, according to a report on historic cannabis consumption published in the journal Economic Insights.
In 2015, Canadians consumed about 700 tonnes of pot, compared with 225 tonnes in 1973, which the report – Experimental Estimates of Cannabis Consumption in Canada, 1960 to 2015 – estimated to be worth between CA$5.0bn to CA$6.2bn.
This is would make the cannabis market in Canada in 2015 roughly one-half to two-thirds of the size of the $9.2 billion beer market, or around 70% to 90% of the size of the $7 billion wine market, it added.
The report also investigated the changing consumption patterns of cannabis from 1960 to 2015, finding that its use has increased over the years to become more popular with an older generation.
In the 1960s and 1970s cannabis was primarily consumed by young people, according to the report. But in 2015, only 6% of 15-17 year olds smoked cannabis recreationally, compared to two thirds of adults over 25.
“With regard to the total rate of cannabis consumption, there is a rapid increase in the late 1960s and early 1970s resulting from the expansion of cannabis consumption among youth,” it stated.
“Through the 1980s and early 1990s, declines among youth offset increases in consumption among older age groups. The 1990s have a larger increase in total consumption as both the younger age groups and the older age groups showed increases. Most recently, declines in use among youth have been outweighed by increases among older persons, which have led to an overall increase in cannabis consumption.”
Researchers have estimated the value of cannabis in Canada to be between C$7.14 to C$8.84 a gram, however this is likely to increase to $10 a gram once it is legalised, according to a report by the BBC.
Canada plans to decriminalise and regulate recreational marijuana us by July 2018, after which Canada’s federal government is expected to levy a 10% excise tax or C$1 per gram of the final retail price, whichever is higher, with each province taking home 75% of those revenues.
The report in Canada’s booming trade in cannabis follows a wave of businesses looking to get in early on the burgeoning market for cannabis, with Constellation recently buying a 9.9% stake in Canadian marijuana company Canopy Growth Corp for £141 million with the intention of producing cannabis-infused drinks.
Canopy Growth is the world’s largest publicly traded cannabis company with a market value of £1.3 billion. Chief executive Rob Sands believes cannabis will eventually be made legal for recreational use in all American states, and has stated that Constellation wants to be ahead of the game.
Sands plans to make alcohol free cannabis drinks like sodas, coffees and fruit-based drinks, which are expected to be made legal in Canada as early as 2019.
Meanwhile former Budweiser marketing executive Chris Burggraeve has drawn comparisons between the cannabis market with the craft beer industry, believing weed could one day be as popular.
Burggraeve sits on the advisory board of GreenRush Group, a San Francisco-based startup that bills itself as “the Amazon of weed” and connects buyers to dispensaries and delivery people in California and Nevada.
In the US, recreational marijuana use is currently legal in eight US states, while 21 states allow it for medicinal purposes. Recreational use of cannabis will be made legal in California on 1 January 2018.
The US cannabis industry was worth US$6 billion in 2016, and is forecast to reach $50 billion by 2026.