Canopy Growth Corp.’s Bruce Linton says that the new Statistics Canada estimates are likely low-balling the amount of money Canadians spent money on marijuana last year. And anyway, the cannabis industry will have many more new growth avenues once it’s legalized, says the CEO.
In the lead-up to legalization of cannabis, Statistics Canada has brought forth provisional estimates related to the production, consumption and distribution of cannabis in the Canadian economy, ones which peg the illegal production of weed for non-medical purposes at $4.6 billion in 2017. That’s along with another $400,000 produced for medical purposes. Adding in non-domestic imports of the drug, that comes to 4.9 million Canadians between the ages of 15 and 64 who spent an estimated $5.7 billion on cannabis last year, which runs to about $1,200 per pot consumer.
The new figures are in line with previous estimations, such as that from a Deloitte survey in 2016 which put the Canadian retail market for cannabis at between $4.9 billion and $8.6 billion.
But the Stats Can numbers are probably on the low side, says Linton, who contends that, in reality, those numbers should be almost double, since surveying average Canadians about their recreational pot purchases while the drug is still illegal are always going to be off.
“The government has asked people, ‘How many illegal transactions have you conducted this year?’ but, I dunno, did the government ask you, and did you tell the truth?” Linton said to BNN’s Michael Hainsworth. “I suspect these things probably underreport and the answer is going to be between $6 and $10 billion.”
Either way, Linton argues that once the supply chain for marijuana gets regulated and new products (drinks, edibles) come on the market, a whole new sector will open up.
“Go out two years or a year when things get more sophisticated and we’re no longer selling the cannabis but we’re selling, I dunno, beverages that are made with zero calories and cannabis as the intoxicant and they show up on the shelf at the LCBO or cannabis store,” says Linton. “I think that changes the size of the market.”
The report also mentions an increase in pot consumption over recent decades by the age group between 45 and 64, who in 1975 accounted for just four per cent of household spending on pot but now make up 23 per cent.
Linton says that Canopy has that age demographic as a target point, saying, “Inside our shop we talk about the 54-year-old woman who has the Gucci bag and what kinds of products she’d like to buy that involve cannabis.”
“That group is looking for the consent because they’re lawful actors,” Linton says. “They’ve been around for long enough, they pay their taxes, they follow the speed limits and they want to do things by the book. And they’re going to adopt consumption patterns that involve provincial locations, very rapidly, and that is a good segment of the business to have.”