Cannabis Made Clear
What’s Changed After Five Years of Legal Cannabis in Canada?
It's the five-year anniversary of cannabis legalization in Canada. How has this changed the illicit market, and how have Canadians’ attitudes toward cannabis changed?
October 17, 2023 marks the five-year mark for cannabis legalization for adult consumption in Canada. On October 17, 2018, Canada became the second country in the world to legalize the sale, possession and non-medical consumption of cannabis by those of legal age. This followed the legalization of cannabis for medical purposes approximately two decades earlier.
Highlights
- Nearly 50% of cannabis consumers buy legal for safety reasons.
- Two-thirds of Ontarians have positive perceptions of cannabis consumption.
- 73% of Ontarians agree that the cannabis industry helps generate tax-paying jobs.
- Three-quarters of Ontarians believe legalization is good for Canada.
What is the Cannabis Act?
The Cannabis Act has three main public-health goals: to keep cannabis out of the hands of youth, to reduce the illicit-cannabis market and to protect public health and safety by allowing adults access to legal cannabis.
Legalization successes at a glance
- Ontario’s legal market now exceeds illicit sales, with a 59.8% share.
- As of 2022, the cannabis industry has contributed $43.5 billion to Canada's GDP — and $13.3 billion to Ontario’s GDP — since legalization.
- 55% of cannabis consumers said the health warnings on products increased their knowledge of the harms related to cannabis consumption.
Since legalization, the Government of Canada has implemented a public-health approach to help keep cannabis out of the hands of youth and to help ensure adults have access to a quality-controlled and regulated supply while reducing the scope and scale of the illicit market.
The federal government controls the rules for cannabis import, export and production. Provinces and territories determine how cannabis is distributed and sold within their jurisdictions. Each province and territory also has the flexibility to set additional restrictions, including limits on possession, personal cultivation and public consumption, and increasing the minimum age of consumption.
Harm reduction is an essential part of fully understanding and keeping yourself informed about cannabis consumption. Check out these 10 ways to help reduce risk.
How have Canadians’ attitudes changed since legalization?
Significant work has been done to correct misconceptions about cannabis and the people who consume it. Two-thirds of Ontarians have positive perceptions of cannabis consumption. According to OCS data from 2023, approximately 66% of Ontarians feel mostly positive about cannabis consumption in the province, with 73% agreeing that cannabis helps generate tax-paying jobs.
In fact, according to a survey conducted by the OCS (OCS Brand Health, Angus Reid 2023), nearly 48% of Ontarians have consumed cannabis in the past year. According to the 2022 Canadian Cannabis Survey, this number is about 27% across Canada. While education about the legal cannabis industry remains a primary focus, 74% of Ontarians say legalization was mostly good for Canada. Ontarians take comfort in knowing that legal cannabis comes from a safe source, saying Licensed Retailers have better quality control (73%), product safety (73%) and their products are free of harmful contaminants (72%).
How has cannabis legalization affected the illicit market?
One of the main goals of legalization from the beginning was to displace cannabis sales from the illicit market, and Ontario continues to gain market share from illegal business. Since legalization, Ontario has significantly reduced illegal cannabis buying, taking 60% share from illegal channels, an increase from 53% in 2021. Almost half of cannabis consumers say their top motivation for buying legal cannabis is product safety.
There has been a dramatic reduction in reported cannabis incidents and charges following legalization. Youth have faced significantly fewer cannabis possession and trafficking charges, and Ontario continues to reduce the risk to youth and public health through outreach and education.
The rate of youth ages 16 to 19 reporting past-year cannabis consumption significantly decreased from 44% in 2020 to 37% in 2021.
The OCS recently launched Cannabis Made Clear, a new hub for evidence-backed facts about cannabis consumption, health effects and harm reduction to continue to support the public in making informed decisions about cannabis.
What challenges and opportunities remain?
To create a successful and thoughtful cannabis industry that maintains a balance between public-health priorities and a robust legal framework, challenges and opportunities remain:
- A lack of diversity industry-wide.
- The environmental impact of carbon emissions, plastic waste and water use.
- Market oversaturation and declining cannabis prices affecting business profitability.
- Prioritizing access to evidence-informed education about cannabis to help ensure consumers have a safer and more positive experience.
Given that the prohibition of cannabis resulted in the disproportionate criminalization of certain groups, particularly Black and Indigenous communities in Canada, providing opportunities for social and economic participation in the legal framework is a particularly pressing issue in the sector.
A survey of 700 directors and executives from over 200 cannabis firms showed that men still hold the majority of leadership positions in the cannabis industry. According to the data, 72% of those surveyed were men, 14% of which belonged to minority groups. Only 12% were women, and of that cohort, only 2% belonged to minority groups, including South Asian, East Asian, Indigenous, Arab, Hispanic and Black individuals.
Cannabis production, like other forms of industrial agriculture, requires a significant amount of energy, water and other resources, which contributes to its overall environmental footprint. The main challenges post-legalization are water use and the predominance of single-use packaging. While the government and industry stakeholders are addressing these environmental concerns, more effort is needed to make cannabis an environmentally sustainable industry.
At the moment, the excise tax equals 33% of cannabis sales revenue (based on an estimated $4 per gram wholesale). In a competitive market, cannabis prices continue to drop, affecting the overall profitability and sustainability of the industry. The decline in cannabis prices, primarily due to oversupply, has meant that most licence holders struggle with profitability.
Legal Use Trends
- 48% of Ontarians have consumed cannabis in the last year
- 50% of 20-to-24-year-olds have consumed cannabis in the past 12 months.
- Males (30%) reported a higher percentage of cannabis consumption in the past year than females (25%).
- The most common method of consuming cannabis among Canadians is smoking (70%), edibles (52%) and vape pens (31%).
- The rate of youth ages 16 to 19 reporting past-year cannabis consumption significantly decreased from 44% in 2020 to 37% in 2021.
- Since legalization, Ontario has significantly reduced illegal cannabis buying, taking 60% market share from illegal channels.
- 74% of Ontarians say legalization was good/mostly good for Canada.
- 73% of Ontarians agree cannabis helps generate tax-paying jobs.
- 63% agree legal cannabis supports local businesses in Ontario.
- Almost half of cannabis consumers say the top motivation to purchase legally is knowing the products are safe.
- Two-thirds of Ontarians have positive perceptions of cannabis consumption.
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