Seven Years On: Canada’s Cannabis Boom Delivers Billions but Falls Short on Promises

It’s been seven years since cannabis was legalized. Canada is tallying its gains. The figures are impressive, but detailed data shows that not everything went according to plan. The federal government earned less than expected. Meanwhile, education spending turned out to be significantly lower than promised.

Since October 2018, Canada has collected a staggering amount from cannabis taxes, totaling over 5.4 billion Canadian dollars.

These data were released in response to a parliamentary inquiry. They provide one of the most accurate snapshots of the global cannabis market. They show who has benefited most from legalization and who has been left behind.

Canada’s provinces win the money race

Most of the money didn’t reach the central treasury in Ottawa (Canada’s capital). As much as $4.2 billion was taken by provincial governments.

Ontario took home the largest sum . It’s Canada’s most populous province, receiving $1.5 billion in cannabis sales. However, Ontario isn’t the real winner.

Alberta leads the way per capita

The biggest winner is Alberta . This province has three times the population of Ontario. Yet, it has generated just over a billion dollars in revenue from cannabis. On a per capita basis, the numbers are astonishing:

Alberta: $210 profit per person.
Northwest Territories: $135.80 per person.
Yukon: $126.35 per person.

Quebec at the tail end

At the other extreme is Quebec , where tax revenues were just $55.31 per capita

Why such a large difference? Quebec has adopted a very cautious sales model. The state has a monopoly on trade, and prices are strictly controlled. Reduced availability of stores and strict regulations have translated into lower budget revenues.

Cannabis Tax Canada

Officials in Ottawa had hoped for larger profits. The federal government received only $1.2 billion of the total .

The plans were more ambitious:

The 2018 budget assumed revenues of $690 million over the first 5 years. Reality has proven these plans ineffective. By 2023, only $567 million had been raised.

Cannabis producers have long warned the government that taxes are too high. The excise tax structure (a commodity tax) is destroying the profitability of legal businesses. As a result, the industry is growing more slowly than anticipated.

Promises vs. Reality: Where is the Money for Education?

The most controversial section of the report concerns prevention. The government promised to allocate a portion of marijuana profits to public education. It planned to spend $83 million on this over five years. What happened to that money?

Health Canada has spent just $21.6 million so far . That’s just a quarter of the promised amount.

What has spending looked like in each year?

Year 2018/2019: $13 million spent (over half of the total)

Pandemic years (2020-2022): Spending dropped to less than $500,000 per year.

Year 2024/2025: Spending slowly increases to $2.3 million.

Experts are sounding the alarm. Tax revenues are enormous, but the money isn’t returning to society in the form of educational programs.

Conclusions after seven years

Canada’s legalization experiment continues. It has generated billions in revenue for the government. However, it has shown that the market alone isn’t enough.

The distribution of funding is uneven. Some provinces are making a fortune, while others are losing money due to bureaucracy. More importantly, the government has forgotten its promises regarding education. Legalization is a process, and Canada is still learning from its mistakes.

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(Featured image by 2H Media via Unsplash)

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