4 Years After Legalization, Cannabis Tax Revenue Finally Meets Annual Federal Estimates: StatCan

A marijuana plant in Vancouver on Oct. 17, 2018. (Don MacKinnon /AFP/Getty Images)

Last year, sales of legal cannabis taxed by provincial and federal authorities finally met estimates tabled by the Liberal government in 2018 when it legalized recreational marijuana, according to a recent Statistics Canada report.

Recreational cannabis sales across the country facilitated by “provincial cannabis authorities and other retail outlets” in the 2021-2022 fiscal year totalled $4 billion, the federal agency wrote, which it said is equal to just over $130 for every Canadian who is of legal age to consume marijuana.

With $4 billion in sales, total federal and provincial tax revenue collected from recreational cannabis retailers totalled $1.6 billion, said the report titled, “Control and sale of alcoholic beverages and cannabis, April 1, 2021 to March 31, 2022,” published on Feb. 24 and first reported by Blacklock’s Reporter.

“This includes net income from provincial liquor and cannabis authorities, excise taxes, retail sales taxes, other specific taxes, and licenses and permits,” Statistics Canada wrote.

Liberal MP Bill Blair, the parliamentary secretary of justice at the time, told the Senate National Finance Committee in 2018 that the government estimated that legal cannabis sales would total around $4 billion every year after its recreational use was legalized.

Blair noted that it was “a little bit challenging” to determine the state of Canada’s marijuana market.

“Organized crime does not share its data with us, they really don’t,” he told the committee on Mar 23, 2018. “There’s been a number of estimates.”

Black Market Cannabis

Blair also told the committee in 2018 that Ottawa never expected it would be able to quickly push out the illicit cannabis market, saying it would be “much more of a process than an event.”

“They will not get up and walk away on the day the [cannabis legalization] law comes into effect. That would be absurd to suggest. That’s certainly not what we’re suggesting,” he said.

An October 2022 briefing note from the Department of Public Safety said that about 33 percent of Canada’s cannabis market is still controlled by the black market despite the substance being legal for over four years.

“One of the main goals of legalization of cannabis was to reduce criminal activity by keeping profits out of the pockets of criminals. The illicit drug trade provides organized crime with one of its most financially lucrative criminal markets,” the briefing note read.

“There continues to be a well entrenched illegal market in place.”

A Health Canada report published in December 2022 said more Canadians surveyed bought from legal cannabis retailers last year than in 2021.

It also said that a “smaller proportion [of respondents] reported illegal storefronts and illegal online sources in 2022 compared to 2019,” and added that only one percent of survey respondents reported buying cannabis from an illegal dealer in 2022.