A recent report by Deloitte Canada states that marijuana has contributed more than $43 billion to the country’s gross domestic product (“GDP”). Since recreational marijuana was legalized in 2018, it has also contributed more than $13 billion to Ontario’s GDP.
The report, which was compiled with help from the Ontario Cannabis Store, stated that for every $1 in capital expenditures or revenue, the marijuana industry added roughly $1.02 and $1.09 to Ontario’s and Canada’s gross domestic product from legal purchases. The Ontario Cannabis Store is a provincial distributor of cannabis.
The report also provides insight into how the marijuana industry in Canada has impacted the nation’s finances over the past few years. For example, it states that in three years, the country’s marijuana sector has emerged as a burgeoning new source of economic growth, supporting and creating thousands of employment opportunities in various communities. Thus far, the cannabis industry has created more than 150,000 jobs and sustains roughly four jobs in Ontario and Canada each for every million dollars in capital expenditure or revenue.
The report also noted that it expected the sector to make an increasingly positive and strong impact on provincial and national economies as it matured and grew. Report estimates show that the cannabis industry has generated an estimated $3 billion and $15 billion in tax revenues for Ontario and Canada as a whole, respectively. Consumer purchases alone have generated $2.9 billion in excise and sales taxes.
The estimates also show that at the Ontario level, marijuana producers and retailers were responsible for $1.2 billion in indirect taxes, $141 million in direct taxes and $674 million in other taxes, while consumer purchases brought in $1 billion in excise and sales taxes.
With regard to diversity within the industry, the report found that not much had changed since marijuana was legalized in October 2018. Before legalization, almost all federally licensed marijuana producers were managed by Caucasian men. It cited a study conducted by the University of Toronto and the Center on Drug Policy Evaluation which found that racialized women and men were considerably underrepresented among marijuana company directors and executives.
This study gathered responses from 700 directors and executives from more than 200 firms. It found that of the total number, 72% were Caucasian men, 14% were racialized men, 12% were Caucasian women and 2% were racialized women. The racialized portion encompasses South Asian, East Asian, Indigenous, Arab, Hispanic and Black individuals.
The stats on the type of contribution the cannabis sector has made to the GDP of Canada is an indirect bill of health for entities such as Flora Growth Corp. (NASDAQ: FLGC), which operate within the legal cannabis industry in Canada and beyond because the health of these companies translates into greater tax revenues and salaries for employees as well as other multiplier effects.
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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