High sales

Con­sul­tant says Canada’s le­gal pot in­dus­try would gen­er­ate bil­lions of dol­lars

Cape Breton Post - - Canada - BY ANDY BLATCHFORD

A U.S. con­sul­tant hired by Ottawa to as­sess Canada’s even­tual recre­ational pot mar­ket says ju­ris­dic­tions that reg­u­late cannabis should ex­pect “un­be­liev­ably high” sales growth in the first few years as crim­i­nals are driven out of busi­ness.

Adam Orens, a found­ing part­ner of the Mar­i­juana Pol­icy Group, said he is not yet au­tho­rized to dis­cuss his find­ings on the fu­ture Cana­dian pot mar­ket be­cause his or­ga­ni­za­tion is un­der con­tract with Health Canada.

How­ever, a look at the group’s es­ti­mates for Colorado’s reg­u­lated cannabis in­dus­try sug­gests Canada can ex­pect its own sec­tor to gen­er­ate bil­lions of dol­lars per year in di­rect and in­di­rect eco­nomic ac­tiv­ity.

Colorado’s mar­i­juana in­dus­try churned out nearly US$2.4 bil­lion in eco­nomic ac­tiv­ity in 2015, cre­ated 18,000 full-time jobs and pumped US$121 mil­lion in tax rev­enues into state cof­fers, Orens’ group re­ported in a study re­leased last fall.

A key take­away from the Colorado re­search is that newly le­gal­ized pot in­dus­tries should be ready for a sales jolt over the first few years as black-mar­ket trans­ac­tions shift to the reg­u­lated mar­ket, Orens said.

His Den­ver-based firm found that Colorado’s reg­u­lated mar­i­juana sales sky­rock­eted 42.4 per cent be­tween 2014 _ the first year recre­ational pot sales were per­mit­ted in the state _ and 2015, when they to­talled US$996 mil­lion.

“We’ve had un­be­liev­ably high yearover-year growth rates in sales,’’ Orens said in an in­ter­view, adding the group ex­pects sim­i­lar sales booms in other pot-reg­u­lat­ing places such as Wash­ing­ton state, Cal­i­for­nia and Ore­gon.

“This is a con­ver­sion of an ex­ist­ing, in­for­mal mar­ket into a for­mal, reg­u­lated mar­ket and you’re go­ing to see sev­eral years of very fast growth.’’

Af­ter the ini­tial surge, how­ever, he noted the Colorado study pre­dicted con­sid­er­ably slower sales growth un­der the ex­pec­ta­tion that the black mar­ket will grad­u­ally be swal­lowed up. The re­port pro­jected sales growth of 13.1 per cent in the state in 2020.

While ev­ery ju­ris­dic­tion is dif­fer­ent, Canada’s pop­u­la­tion is seven times larger than Colorado’s.

The Trudeau gov­ern­ment, which re­cently in­tro­duced leg­is­la­tion to le­gal­ize recre­ational pot, has be­gun as­sess­ing the eco­nomic im­pacts of a reg­u­lated pot in­dus­try in Canada as well as tax­a­tion op­tions.

CP PHOTO

A Cana­dian flag with a mar­i­juana leaf on it flies dur­ing a rally on Par­lia­ment Hill in Ottawa last month. A U.S. con­sul­tant hired by Ottawa to as­sess Canada’s even­tual recre­ational pot mar­ket says ju­ris­dic­tions that reg­u­late cannabis should ex­pect “un­be­liev­ably high” sales growth in the first few years as crim­i­nals are driven out of busi­ness.

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