Although much of the cannabis revenue is expected to come after legalization this fall, the findings show that between $500 million and $1 billion of the cash will continue to funnel into the black market, at least for the time being, according to the report released on June 5, 2018 prepared by accounting firm Deloitte.
As for the heftier portions of the $7 billion forecast, legal recreational cannabis sales are expected to reach up to $4.34 billion. Medical marijuana will be bringing in between $770 million and $1.79 billion as well.
Federal Government Get Its Wish
One takeaway from this study is that legalization will seemingly do what the government intends, which is to help stamp out Canada’s longstanding black market.
Two-thirds of respondents said they will switch their purchases to legal retailers when cannabis prohibition finally ends. This is despite the fact that Deloitte estimates legal weed will cost 74 Canadian cents more per gram on average. That is about 57 US cents more per gram, according to the US and Canadian dollar exchange rate as of Thursday, June 7, 2018.
The report also stated that the black market will further shrink as legalization continues.
“Over time, as retailers develop a better understanding of their customers’ needs and behaviours, improve their customer experience and engagement programs, and fine-tune their products’ quality and integrity, we could expect to see an increasing share of cannabis sales transition to legal sources,” the report said. “Executed well, legalization will also help shift a considerable proportion of cannabis consumption to legal channels in the years to come.”
Further illustrating the changing attitudes of cannabis consumers, the results also showed that 6 out of 10 cannabis users will choose edibles over other forms of marijuana. Edibles are not expected to be legal until approximately a year after legalization commences sometime in or after summer 2018.
The report was based on answers from an online survey conducted from March 6, 2018 to March 20, 2018, in which 1,500 Canadian adults gave their opinions on myriad cannabis questions.
Jon Hiltz was a journalist for Marijuana.com for two years and is now director of content for INDIVA, a licensed cannabis producer in Ontario, Canada.