Perspectives:
Does the commercialization of cannabis signal a watershed moment in Canadian business?
Commercializing cannabis is not a watershed moment for Canadian business. Here are four reasons why:
First, the cannabis market is already at or near its ceiling. Canadians are far from an untapped market in terms of cannabis use. In fact, Canadians are already among the world's heaviest cannabis users (United Nations Office on Drugs and Crime, 2018), and Nova Scotians consume the most cannabis per capita in Canada (Statistics Canada, 2018).
Second, cannabis legalization eliminates barriers to cannabis use (e.g., criminal penalties). But research shows cannabis legalization is unlikely to substantively increase rates of cannabis use (Wayne Hall & Lynskey, 2016).
Third, we are not creating a new cannabis economy. Rather, we are replacing an illegal cannabis economy with a legal cannabis economy. Illegal jobs will be lost, and legal jobs will be gained. And more jobs will be lost than gained, mostly because the legal cannabis economy will be more efficient than the illegal cannabis economy. For example, legal cannabis production (vs. illegal cannabis production) will better capitalize on economies of scale.
Fourth, various sources project cannabis market profits between $5-billion and $8-billion (Parliamentary Budget Officer, 2016), representing a small increase of around two per cent to Canada's gross domestic product. And even this increase may very well be an accounting illusion, as much of this money was already part of Canada's economy in the form of illegal and unaccounted for profits. It's certainly an interesting time.
Although the laws may be changing to decriminalize cannabis use within strict guidelines, the social norms will take some time to catch up.
Liquor, even with the blip of prohibition, has been socially acceptable and a public part of Canadian society for a long time.
The implications of drinking and the repercussions of the behaviours brought on by drinking have helped to shape our society. The social use of recreational marijuana has remained underground, part of a sub-culture vs. mainstream.
Cannabis has been used by human societies for a long, long time and has remained a strong sub-culture in Canada for the last 50-odd years with plenty of average citizens enjoying a minor flirtation with the underground economy due to the laws prohibiting it. The underground has flourished under this prohibition as markets have evolved and marketeers have profited. Now that the law has loosened and the government is making an effort to benefit from the existing market, times will certainly change.
The real boon for small business remains to be seen. It's a new industry with plenty of medical, and social benefits if consumed within moderation, and the market is huge in Canada. “Absolutely it's a big moment. I'd say it's pivotal. There's already a green rush of people trying to get their feet in business before legalization. The unfortunate part is that some provinces have made it so other businesses, like ours, won't be able to reap all of the benefits because of the legislation. But I'd say it's the biggest cultural change we will probably see in our lifetime. The last time something this big happened was prohibition. I think it's going to create new opportunities as long as they'll allow it.” “I'm not benefiting from its legalization, because I don't smoke it. I'm not, like, absolutely must be legalized, and then on the other side I'm not saying it shouldn't. I don't really have any opinion on it. October 17 is just going to be another day. I mean, yay for job creation and a new line of business opening, but I don't think the legalization of cannabis makes us any different. We're not the first place in the world to legalize it. I just don't think it's that big of a deal. I'm just happy it will be regulated, and you'll know what's in it.”