Legal pot hasn't even been on sale for a month in Canada, and yet the weed industry there is already worth more than hockey is. You read that correctly: Even Canadian hockey, with a nearly $2 billion economic impact, is no match for the $6.61 billion impact legal pot is predicted to have on the Canadian economy.
With roughly the same population as the state of California, Canada doesn't have a particularly large number of people, and its economy is far smaller than that of the United States. So why is Canada's legalization such a big business?
It's because Canada actually legalized pot, something the US has never done. Individual states like California and Washington have legalized weed, but cannabis remains highly illegal according to US federal law. Canada went the opposite route: The federal government legalized pot, and then let the local governments decide on regulations.
That has left Canada with a patchwork of pot laws. Some territories, like Alberta, allow 18-year-olds to buy legal pot, but other places, such as British Columbia, make people wait until they are 19 to legally toke. Manitoba won't allow residents to grow their own pot (boo!), but Nova Scotia allows every adult to grow up to four plants at home (yay!). New Brunswick will allow pot to be sold only in person at government-run stores (like Washington's old liquor law system), whereas BC will have private stores and government stores, and even allow for online sales.
Even with these regulatory differences across the country, pot is still legal everywhere in Canada, and that's giving our northern neighbors a business advantage. Big companies are very hesitant to get involved in the US's legal state markets because of our federal prohibition. That has left state industries trailing according to a new report from cannabis analytics firm New Frontier Data, which compared Canada's market to California's.
"While comparisons can be made to California's legal cannabis market, Canada stands alone in terms of scope and importance on the world stage," the report's authors wrote. "This was mainly due to Canada's being a safer play, with a federally legal medical market."
That's opened the door to huge investments. New Frontier Data tracked a 600 percent increase in corporate pot deals in Canada from 2017 to 2018, including deals that have made some pot companies worth more than $10 billion. The tobacco and alcohol industries are also investing in this new market. Constellation Brands, which owns beer brands like Corona and Ballast Point, dropped $245 million in a Canadian pot producer, and Alliance One, a North Carolina tobacco company, now has a controlling stake in a Canadian pot grow.
The Canadian market launched this month with pot shortages, but once these huge, billion-dollar companies get up and running, they will each be able to produce more than 100,000 kilograms of pot a year, according to New Frontier Data's estimates. The data firm thinks the entire market will only consume 300,000 to 400,000 kilograms of pot a year. That adds up to an oversupply problem, and small pot growers are worried.
There is one alleviating factor to Canada's impending oversupply problem: Full legalization means Canadian pot companies can enter into international agreements to sell their pot overseas. Some Canadian companies already have agreements to export pot to other countries, including Germany, Denmark, Brazil, and Jamaica.
These trade deals may ease Canada's oversupply problem, but they don't make it legal for you to buy pot in Vancouver and drive it to Seattle. Thanks to our country's idiotic federal prohibition on weed, our border patrol agents are still total dicks when it comes to pot possession, and will likely arrest you if they find any on your person. The US border patrol is even considering banning Canadians that work in the pot industry from entering the US
While the US maintains those insane policies, Canada is showing the world how to legalize pot on a national scale. It might just make our northern neighbors more famous for cannabis than for hockey.