Canada: The cannabis industry has generated CA$15 billion in taxes and 151,000 jobs since legalization

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Despite the difficulties facing Canada’s largest cannabis companies, its legal industry has had a significant economic impact since the legalization of cannabis in 2018, according to a new report released today by Deloitte.

According to Deloitte, the cannabis sector has generated more than CA$15 billion in direct and indirect tax revenue for Canadian and provincial governments, while creating more than 151,000 jobs since Canada legalized cannabis for adults in October 2018. .

Although Statistics Canada and Health Canada regularly publish data on the sales and impact of cannabis in the country, Deloitte’s report offers a more focused look at tax revenues and the labor market since legalization.

In total, the Canadian cannabis industry contributed C$43.5 billion to the country’s economy between legalization and 2021, according to Deloitte. The industry invested approximately C$4.4 billion directly into the economy, while C$29.3 billion came from “indirect” economic contributions and C$9.8 billion from “induced” contributions, according to the report.

“Our hope with this report is that people realize that the industry has done much more than just provide [aux producteurs autorisés] $4 billion in retail access,” said Rishi Gautam, a partner at Deloitte who leads the consultancy’s cannabis practice. “It filled government coffers and was a boon to the construction industry.”

Deloitte defines indirect economic contributions by activity generated in other sectors, for example the construction of giga greenhouses, while induced economic contributions are defined as consumer expenditures arising from wages earned from cannabis jobs.

The report points out that the indirect economic impacts were modeled to be greater than its direct economic contributions “due to significant capital expenditures in construction and modernization-related activities. »

CA$11 billion of cannabis purchased in 3 years

Since 2018, Canadians have purchased CA$11 billion worth of cannabis, while companies responsible for producing and selling legal cannabis have invested CA$29 billion during that time, Deloitte said. Of the tax revenues generated, approximately C$1 billion came from direct contributions to government revenue, while another C$2.9 billion came from sales and excise taxes. The remaining C$11.2 billion was calculated from indirect and induced tax sources.

The report states that more than 43,479 people are directly employed in the cannabis industry, while another 88,595 people have indirectly found employment through the legal cannabis sector. He adds that for every million dollars in revenue or capital expenditure, the cannabis industry supports about four jobs in Canada.

“We’ve read a lot about the volatility of employment in the cannabis industry,” Rishi Gautam said. “There was this period in Canada where it seemed like every [producteur autorisé] was laying off people, which was taken into account in these figures. »

The report also shed light on the lack of diversity seen in the Canadian cannabis industry and revisited a University of Toronto study which found that 72% of executives and directors in the sector identify as Caucasian men. , while only 16% identify as racialized.

The study also highlighted the environmental impact of the cannabis industry, with 5,184 kilograms of carbon emissions released into the atmosphere for every kilogram of dried flower produced. Additionally, between 5.8 million and 6.4 million kilograms of cannabis packaging was sent to landfill between 2018 and 2019 alone, according to the report.

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