Sunday, August 05, 2018

Canada's legalization of cannabis - is it actually a big deal?

I am getting heartily sick of reading about cannabis in Canada's newspapers. The hype is huge. In today's paper alone, there was advice on how to grow it, how to drink it, how to cook with it, how to buy it, how to bring in tourists with it, how to invest in it, and more. There is something pretty much every day, especially in the business pages, as investors rush to inflate what looks to me suspiciously like a bubble of astronomical proportions.
Yes, I understand that we, here in Canada, are about to legalize marijuana, and that this is a big deal for some people. But it's really not a big deal for me, as I am as little likely to take up smoking pot as I am to take up smoking tobacco. And I have to wonder whether it is actually a big deal for the country as a whole. Perhaps the best way of estimating that is to look at a state like Colorado, which now has four years of experience of legalized marijuana under its belt.
So, how is the cannabis industry in Colorado looking? It turns out that marijuana sales account for just 0.55% of the state's total consumer spending. So, in the scheme of things, not a lot. Cannabis businesses make up less than 0.7% of new businesses since 2014, and the industry employs about 0.7% of Colorado's workforce. Where it does come into its own, though, is in taxation: cannabis sales are heavily taxed, and total taxes collected from marijuana make up 2.3% of the state's tax revenues.
So, it's kind of a big deal, but not, I still maintain, enough to justify the blanket media coverage it is receiving in the Canadian press.

No comments: