You know the dealer, the dealer is a man – with the love grass in his hand 1968, Hoyt Axton sung by Steppenwolf
So, as you stand in line at your local cannabis outlet (weed store or dealer). Here are a few numbers to mull over.
Statistics Canada has been busy trying to estimate the market for weed in Canada. And the main statistical source they are relying on is – users. Statscannabis is a snappy little website where users could report how much weed they use and how much they pay for it.
As a revenue forecasting model what could possibly go wrong with that??
Then with the caveat that some of the Canadian data may be blowing smoke… here we go:
- Considering varying age restrictions in each province there are roughly 30 million potential customers.
- About 15% of that population are using weed now – about 4.5 million rascals and scofflaws!
- About 650 thousand users spend more the $250 in a three month period.
- StatsCannabis thinks that about 50% of current users will switch to the legal system.
- Another 25% might switch if the price, quality and deliver methods are convenient.
- And prices are falling at least according to StatsCannabis.
- As for those of us who don’t use: 6% will very likely try and a further 9% might try the evil weed.
- All in all, that means roughly a market of 5.4 million legal users and another 1.7 users who will stick with the illegal system (AKA Their Guy). All in – over 7 million!
- Alberta has about 12% of Alberta’s population so the Alberta market might be about 650,000 users.
- In Alberta, the AGLC has responsibility for licensing and online sales. This year and next they expect to lose money. $43 million this year and $47 next year. In 2021, they will turn a profit of about $37 million.
- Its online website had 11,000 visitors wanting to buy grass after midnight on October 17th.
- Alberta will also get 75% of the federal excise tax – $26 million this year and $80 million in 2019. And rising to $99 million in 2021. (hold off on those severely normal thoughts you have about government-run businesses.)
- Alberta will grant a total of $11.2 million in the next two years to municipalities to deal with cannabis related costs, which is woefully inadequate given their costs to prepare.
Severely Normal Albertans will readily see that this is no instant cash cow. And when you consider the public health risks to younger Canadians and new enforcement challenges, you might be forgiven if you think this is a questionable policy.