A report released in early May 2018 by the Canadian Imperial Bank of Commerce (CIBC), a major financial institution in Canada, revealed that recreational cannabis could reach $6.5 billion annually by 2020.
The assessment prognosticates that Canadians will consume 800,000 kg, or more than 1.673 million pounds, of cannabis in the next two years.
“We believe that by 2020, the legal market for adult use cannabis will approach $6.5 billion in retail sales,“ CIBC said. “For context, this is greater than the amount of spirits sold in this country, and approaches wine in scale.”
On average, 60,000 kg, or more than 132,277 pounds, of legal medical cannabis is consumed each year. CIBC pointed out “this is a drop in the bucket compared to illicit purchases.”
This is not the first time a major Canadian institution has predicted high numbers for cannabis. Earlier this year, Statistics Canada estimated that Canadians spent $5.7 billion on marijuana in 2017. Most of that amount, approximately 90 percent, were illegal purchases.
In October 2016, accounting firm Deloitte predicted that if supporting sectors such as lighting, cultivation and manufacturing are factored into the equation, Canadian legal cannabis could eventually be a $22.6 billion industry.
Up until January 2018, big Canadian banks for the most part completely ignored the ever-growing cannabis sector or flat out refused to do business with anyone involved. That included the licensed producers trading on the Toronto Stock Exchange. That all changed when CIBC issued its forecast.
Recently, however, cornerstone institutions that include Bank of Montreal and now CIBC, have shed their ignorance on the issue and are now lending and acknowledging this multi-billion-dollar, soon-to-be-legal business.
This recognition will undoubtedly allow the expanding list of cannabis-related ventures across Canada to breathe a sigh of relief as they too prepare for recreational legalization.
Canada is expected to officially end marijuana prohibition by fall 2018.