News

Cannabis legalization good for Canada’s GDP

Published on September 5, 2025 by Pat Bulmer

Photo: Contributed

Cannabis legalization has generated billions of dollars in tax revenues, created thousands of jobs, raised the country’s GDP and put the squeeze on the illicit market, a study shows.

The Six Years of Legalization: The Economic and Social Impact of Canada’s Cannabis Sector was prepared for the Ontario Cannabis Store by Deloitte Canada, and builds on an initial study published in 2022.

The report’s key findings:

— The cannabis industry contributed $76.5 billion to Canada’s gross domestic product, and $23.1 billion to Ontario’s GDP, from legalization in 2018 to 2024.

— The legal cannabis sector sustained approximately 98,200 jobs annually across the country, and 31,900 jobs in Ontario.

— Over six years, the industry contributed $29.6 billion in tax revenue for Canada and $5.3 billion for Ontario.

Cannabis sales across the country from legalization in 2018 to 2024 were $28.7 billion, the report said, of which 86.6% were for recreational pot.

“In Canada, total cannabis sales have increased significantly between 2018 and 2024, growing more than sixfold from an estimated $0.9 billion to $5.8 billion (annually),” the report said.

The report looked at Mississauga, Ont. to show how legalization is choking the illegal industry.

The Toronto neighbour didn’t allow cannabis retailers to open within its borders until April 2023.

“Around the same time, other municipalities, including Ingersoll, Muskoka Lakes and Chapleau, also opted in, bringing the total number of participating Ontario municipalities permitting legal cannabis retailers to 392 or approximately 94% of the province,” the report said.

Within one year, Mississauga had approximately 40 retail stores accounting for $24.1 million in wholesale sales. By March 2025, there were approximately 60 stores and $69 million in sales.

“This growth trajectory in both store numbers and wholesale sales underscores robust consumer demand and highlights the strategic interest in fostering local enterprises within the cannabis industry,” the report said.

The Mississauga experience shows that legalization contributes to reduction in illicit market.

A spring 2023 survey showed 62% of users in the city bought from legal sources, 22% from illegal sources and 16% from both. Months later, the percentages had changed to 80% legal and 11% illegal.

“These findings seem to indicate that the introduction of local legal retailers in communities that did not participate in the legal market has a significant impact on consumer behavior, effectively steering them away from the illicit market.”

And yet, consumption patterns didn’t change with legalization with about 40% reporting they used cannabis before the legal stores came to town and about 40% after.

“These numbers underscore that the presence of local retail stores had not significantly influenced or altered existing consumption habits among city’s residents.”

As of December 2024, Mississauga was also home to five cannabis product manufacturing businesses.

“This concentration solidifies Mississauga’s role in the regional cannabis supply chain, enhancing local economic diversification and industrial development,” the report said.

The OCS estimates the illicit market still accounts for 27.85% of cannabis sales.

Across the country, the number of legal cannabis stores rose from less than 200 at the end of 2018 to 3,000+ now.

“The improved access to regulated products has translated to a greater share of Canadian cannabis consumers obtaining their cannabis products from a legal source and shifting away from the illicit market,” the report said.

“According to the 2023 Canadian cannabis survey, 73% of cannabis consumers reported obtaining at least some of the cannabis they consumed from a legal source in the past 12 months, up from 64% in 2021 and 37% in 2019.

“By the fourth quarter of 2024, over 70.1% of the total value of medical and recreational cannabis consumed in Canada was from a licensed retailer or producer, an increase from 21.6% in the fourth quarter of 2018.”

Over the six years of legalization, the industry invested $42 billion in capital expenditures, the report added.

Other benefits of cannabis industry:

— Other industries also get a boost from the cannabis industry — suppliers, utility companies, transportation, warehousing and professional services, to name some. Cannabis also boosts innovation, especially in agriculture.

— Canada is the second largest cannabis market in world behind U.S., the report says. “Therefore as more countries move toward legalization, Canada has a unique opportunity to set the standard for emerging markets in terms of cannabis policies, research and other areas as a key player in the global industry.”

It’s not a diverse industry, still dominated by white males in leadership positions. Indigenous participation also low, report says.