Canada’s recreational cannabis black market already enjoys annual operating revenue of around 22 billion Canadian dollars ($17 billion) when exports are accounted for, according to Capital Economics senior economist David Madani.
Canada has about 4.2 million regular users of marijuana, Capital Economics estimates.
Those users spent about CA$6.5 billion on marijuana within the nation’s borders last year, Madani told The Globe and Mail, accounting for 30% of Canada’s domestic production of 2.8 million kilograms (3,086 tons).
Madani cautioned, however, that Ottawa’s plan to legalize marijuana by next July might end up hurting Canada’s economy.
He told the newspaper that Canada’s massive underground marijuana industry launders some of its profits by spending cash earned illegally on goods and services, including cars, yachts, clothes and even real estate.
But pilfering a portion of the black market means that money will instead be deployed in other places and could end up having a ripple effect through the broader Canadian economy — potentially even triggering an economic slowdown.
That’s the economist’s worst-case scenario.
Madani’s best-case scenario predicts no “material effect” on economic growth.
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