The Economic Impact of Legalizing Marijuana on Canada

Only two countries in the world have entirely legalized cannabis or marijuana. Uruguay and Canada are two of these countries. As a result, Canada is the only developed country that has legalized marijuana for recreational use and sale. The newly passed legislation by the Canadian Government has spurred a heated debate on both sides. Many observers believe that the real reason for Canada’s marijuana legalization is economic. This post will look at the economic impact of cannabis legalization in Canada.

The Economic Benefits of Cannabis

The following are some of the most often mentioned economic benefits by pro-cannabis advocates:


Cannabis sales in Canada are expected to range between $5 billion and $8 billion per year. Critics of this scheme claim that it generates no new economic activity. This $5 billion to $8 billion annual sum was already a part of the Canadian economy. It was unaccounted for since it was illegal. However, it will be accounted for now that it is legal.


However, this distinction is not insignificant. Because the sale of cannabis is now legal in Canada, the Canadian Government will tax it. The Canadian Government has decided to tax marijuana at $1 per gram or 10% of the retail price, whichever is greater. This means that the Government of Canada will earn an extra $500 to $800 million in taxes per year! Individual states will keep roughly 75% of the proceeds from the sale. As a result, the legalization of cannabis will directly result in a large increase in money for the Canadian Government.


Furthermore, it is predicted that the money earned by employment taxes will increase dramatically. Until now, drug dealers’ revenues were illegal. As a result, they were not taxed. Companies like Rosslyn Place cannabis dispensary will now be able to profit legally. As a consequence, they will be compelled to pay taxes. Additionally, the wages of thousands of employees will be taxed. As a result, the Canadian Government will benefit significantly.

Lesser Government Expenses

The legalization of cannabis is a bonanza to the Government. This is because income rises drastically while expenses fall dramatically. If marijuana possession and sale are decriminalized, the number of offenses in Canada will fall dramatically. There will be no drug gangs conducting drug-related violence on the streets of Canada. The demise of these gangs will result in huge savings for the Canadian Government in law enforcement costs. Furthermore, the number of people imprisoned will drop, cutting the cost of running prisons and, eventually, the cost of rehabilitating criminals.

Tourism Impact

In numerous northern states, the US government is resuming its drug war. In addition, cannabis consumption is illegal in a number of other countries. Canada is likely to appeal to these people who want to get cannabis in Edmonton as a vacation location. The Canadian Government is thrilled about the prospect of visitors from all over the world visiting Canada and that cannabis tourism will result in a huge increase in both private and governmental revenue.

Real Estate Impact

Finally, cannabis legalization is expected to positively impact the Canadian real estate market. This is coming soon due to increased demand for warehouse and retail space, which benefits the real estate industry by boosting the number of commercial and industrial units sold or leased. Rental housing demand is also predicted to rise. This is because states and countries that have legalized cannabis attract more tourists.


To recapitulate, the Canadian Government’s cannabis legalization measures are expected to result in huge economic gains. Other effects must be considered, but if Uruguay and the Netherlands serve as models, there appears to be no harm in legalizing cannabis.