2013-10-03

Canada Opens A $1 Billion Market For Marijuana

Weed has been partially legal in Canada for a long time, but now it's going to be large-scale, certified, better, and cheaper.

In Canada, legal marijuana is old news—it has been available for medical purposes for more than a decade. But up until now, most marijuana made available to patients was homegrown, and as a result, it varied in quality (and presumably, safety).

Earlier this week, however, Canada launched a far more monitored market for medical marijuana. Gone are the home growers. In their place: large-scale, government-certified indoor growing operations that will grow, package, and sell standardized weed to patients—all of which has been examined by health inspectors (presumably to eliminate the possibility of molds and other contaminants, which often run rampant in growing operations). According to the Globe and Mail, these operations will have heavy security, including mandatory security systems and vaults.



Prices will be adjusted in accordance with the market. They'll probably be more expensive than in the past, but that will likely change as production increases (there is no limit on the number of certified growing facilities, and 156 firms have already applied to become growers). Health Canada, the federal government public health agency, estimates that next year, legal weed will cost approximately $7.60 per gram, compared to today's $10 street price and the $5.00 Health Canada price.

Health Canada is hopeful that the new system will reduce the number of black market operations, which often use home-growing setups as fronts. And should Canada ever fully legalize marijuana, commercial producers will be in an ideal position to scale up. That's a winning situation for everyone, right?

Maybe not for patients, who previously could grow their own marijuana. Small-scale growers—there are 4,200, including many patients—will have to shut down (though they were limited to two patients each, so it's not like they'll lose a lot of revenue). Canadian advocates for full legalization are not happy about the new regulations. Time reports:

“They treat pot like it’s plutonium,” says Blair Longley, head of the single-issue Marijuana Party that fielded five candidates in the 2011 parliamentary elections. Speaking to Time, Longley says he’s concerned the market-based system, which nixes the right to cheaply grow marijuana at home, will make marijuana less affordable for patients.

“We always knew that marijuana would get legalized in the worst possible way. It’s not a surprise that that’s what’s happening,” Longley says.

Canada's medical marijuana market is fairly small right now, with just 37,400 registered patients. By 2024, that number will grow to 450,000 people. That same year, revenues from the industry are expected to hit $1.3 billion.

In U.S. states, where marijuana is legal for medical or recreational purposes, small-scale growers are allowed to cultivate weed for patients. Colorado—one of two states that recently fully legalized marijuana—just announced that adults will be allowed to grow up to six plants in their homes.

[Image via Shutterstock]

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