Canada / Industry Insights
Canadian Cannabis Production Industry Booming

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by Rebecca Simon
Jul 13 2018

Revenue from cannabis production has surged recently as a result of the deregulation of medical marijuana and will continue to grow as recreational marijuana is fully legalized in Canada in October 2018.

“The cannabis production industry has experienced several major shifts in industry regulations, as well as broader public perception, causing the cannabis business to experience substantial revenue growth,” says IBISWorld analyst Brian Sayler.

The cannabis production industry in Canada is made up of businesses licensed by Health Canada that cultivate, produce and sell medical marijuana products to consumers.

Cannabis in Canada

IBISWorld estimates that cannabis production industry revenue will grow an annualized 128.8% over the five years to 2018, totalling $501.9 million.

While full legalization of recreational marijuana will not go into effect in Canada until October 17, 2018, following the passage of the Cannabis Act in June 2018, the cannabis production industry derives its revenue from the sale of medical marijuana products to consumers with a variety of health ailments. Medical marijuana can be used to treat patients with conditions such as Alzheimer’s disease, cancer, arthritis, epilepsy and migraines, among others.

Canada became one of the first countries to legalize medical marijuana in 2001. Until 2013, Prairie Plant Systems Inc. was the sole provider of medical cannabis products to patients. Over that year, the Marihuana for Medical Purposes Regulations were enacted, permitting dozens of private companies to obtain licences from Health Canada to produce and sell medical marijuana products to consumers, causing the industry to rapidly expand.

Cannabis market size chart


In addition to loosening restrictions on marijuana, public perception regarding the legitimacy of marijuana as a medical treatment has improved as well.

“While significant concerns persist regarding the legitimacy and efficiency of medical marijuana treatment, the promotion of medical marijuana has been supported by a wide variety of trade associations and advocacy groups, including the National Organization for the Reform of Marijuana Laws and the Cannabis Canada Association,” says Sayler.

As recreational marijuana becomes fully legalized later this year, IBISWorld expects revenue for the cannabis production industry in Canada to increase at an annualized rate of 29.0% over the five years to 2023, totalling $1.8 billion.

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