International Journal of Drug Policy published a report, entitled:“Association of recreational cannabis legalization to changes in total, medical and illegal cannabis spending in Canada”, which concluded that legalizing adult cannabis use was replacing the illicit market.
Data in the report showed that after recreational cannabis laws passed (RCL), medical cannabis represented 11,8% of market share and illegal cannabis 88%. After five years, the research found that medical cannabis had decreased from 3.7 to 2.4%, while illegal cannabis dropped to 24.4%. Licensed cannabis then took 72.0 percent of market share.
According to the report,
Over the past five years, the cannabis market has grown by 75%. The illegal cannabis market grew between the passage of RCL and its implementation, but it decreased after that and showed a downward trend.
They cautioned the authors that there could potentially be uncertainty in data when it comes to illegal cannabis spending.
Method of Research
Researchers said that they had examined the publicly-available estimates for Canadian household spending on cannabis products, including medical cannabis and illegal cannabis. Cannabis spending on illegal products was calculated based upon several factors, such as the amount spent per day, the frequency with which it is used, and its prevalence. The report states that the frequency and prevalence of cannabis use was estimated using population-based surveys. According to the authors, the total size of cannabis was estimated first and illegal expenditures derived after subtracting licensed and medical sales.
In the study, it was stated that illegal cannabis prices came from survey results and data crowdsourced on flowers products. Medical and licensed cannabis price were determined by directly contacting medical producers and retail outlets for oil and flower.
The conclusion of the article is:
The report found that Canada’s legalization appears to have achieved one of its main goals, namely the displacement of illegal cannabis markets. The authors noted, however, that medical cannabis has been affected as well, resulting in less clinical supervision.
In the report, it was stated that the cannabis market has grown considerably in Canada in the first 5 years after legalization. “This suggests that consumption is increasing at a population level,” said the report. The researchers cautioned that a large increase in consumption of adult-use legal cannabis could have a negative impact on the public’s health.