An economist at CIBC, a major Canadian investment bank, is estimating in a new report that Canada’s marijuana market could surpass $7 billion annually – or about $10 billion in Canadian dollars – if legalization proceeds there.
CIBC World Markets economist Avery Shenfeld based the figure on marijuana sales figures on Colorado and Canadian marijuana consumption estimates.
But that figure would be reached “only if all the underground sales are effectively curtailed,” the report said.
Shenfeld also estimated that half of the sales would go to provincial and federal taxes. Shenfeld arrived at the tax revenue estimate based on the province of Ontario’s profits from state-controlled alcohol stores and payroll and other taxes there.
Shenfeld noted that other figures point to a much smaller Canadian marijuana market. For example, based on surveys indicating that just 12% of Canadians smoked marijuana in the last year, and a study in the International Journal of Drug Policy that estimated annual marijuana sales in British Columbia totaled about $280 million ($400 million Canadian), marijuana sales could be closer to about $2.1 billion ($3 billion Canadian) annually.
“Dividing that pie between governments and producers would not appear to leave a lot of room for a fiscal boost unless prices were raised substantially,” the report said.