The legalization of cannabis in Canada is celebrating its 5th anniversary. A thorny subject of Justin Trudeau’s first mandate, it is today not called into question by the federal state but brings its share of concerns for the companies which take part in it and new health and social issues. What is the outcome of these 5 years of legal cannabis?
Society: Changing attitudes and challenges
In the first half of 2023, more than 70% of cannabis consumed in Canada came from legal sources, a significant increase from 22% recorded in the fourth quarter of 2018, just after legalization.
The legalization of cannabis has thus considerably reduced the stigma associated with cannabis, without being an invitation to its consumption. Consumption remains most common in the 18-24 age group. Statistics Canada reports indicate that consumption among 15-17 year olds has also not increased since legalization, which was a major concern for critics of legalization. And the average age of initiation has also increased slightly over time.
However, the provinces are not on the same equal footing. In Manitoba and Quebec, for example, it is still prohibited to cultivate cannabis at home for non-medical purposes. The lack of diversity of legal products in Quebec – for example on edibles sweet or vape pen still banned – leaves many consumers dissatisfied and cedes this category of products to the illicit market.
Justice: Decrease in cannabis-related cases
Quite mechanically, the number of legal cases linked to cannabis has decreased by 73% for women and 83% for men. Cannabis offenses reported by police increased from 99 per 100,000 inhabitants in 2018, the year of legalization, to 28 per 100,000 inhabitants five years later.
Health: Mixed results
While the legalization of cannabis has opened new doors for recreational users, it has also raised health concerns.
A study conducted in Ontario and Alberta reported a worrying 20% increase in cases of cannabis poisoning and disorders. Another study conducted in Ontario found that the number of emergency room admissions increased thirteenfold due to cannabinoid hyperemesis syndrome, often caused by heavy and repeated consumption.
The number of pregnant women exposing their fetuses to cannabis during pregnancy has doubled, and hospital visits for children who have ingested cannabis have tripled. Additionally, the incidence of car accident victims with THC in their blood doubled from 3.8% to 8.6%.
The consensus is that more prevention and education are needed to effectively address these health-related challenges.
Legal Access and Trade: Economic Impact and Industry Challenges
From an economic perspective, the federal government of Canada is the main beneficiary of the legalization of cannabis. The legal cannabis industry has contributed an estimated €30 billion to Canada’s gross domestic product since legalization, with the recreational market averaging around €3 billion annually.
However, cannabis businesses are struggling to be profitable. Only about 20% of cannabis growers are currently reported to be cash flow positive, reflecting the sector’s economic woes. Although legal access to cannabis is widespread, the cannabis business landscape is not without challenges.
In bulk:
- Over-regulation of the cannabis industry limits products, leads to higher regulatory costs and provides limited advertising opportunities for companies
- High taxation of cannabis companies eats into margins. Several business movements call for reasonable taxation
- Despite Canada’s federal legal framework, exports of recreational cannabis products are currently prohibited, impacting the industry’s potential for global expansion.
As Canada celebrates five years of cannabis legalization, regulation is full of successes and new challenges. In any case, it has inspired a growing number of countries which have taken a few steps since: Malta and Germany for legalization around Cannabis Clubs, Luxembourg on self-cultivation, Thailand on very broad decriminalization and Switzerland on legalization experiences city by city. The start of the domino effect?
