Case Studies

Canada’s Marijuana Industry is Coming

Will Edmonton Take Advantage?

With the Government of Canada having put forward its framework for the legalization of recreational cannabis, cities across the country will be looking to capitalize on the marijuana economy and its associated jobs, investment, and tax revenue. Edmonton will be no different, and it’s about time we started thinking strategically about how to make our mark in this new industry.

When legalized, the Office of the Parliamentary Budget Officer (PBO), projects 4.6 million individuals aged 15 and over will use cannabis at least once in 2018 – according to their report Legalize Cannabis: Fiscal Considerations. This number could rise to 5.2 million consumers by 2021.

The PBO estimates that approximately 11.7 percent of cannabis consumption in 2018 will be in Alberta, making the province the fourth largest potential consumer market of the drug in Canada.

Parliamentary Budget Officer, Legalize Cannabis: Fiscal Considerations, 2016

This will mean big business for both Alberta and Canada in all areas of the cannabis value chain – whether it’s in the cultivation, harvest and preparation; the manufacturing of products using cannabis as a raw material; and the distribution and sale of cannabis products. In addition, there will be a multitude of spin-off industries created around the production and sale of cannabis, from tourism to finance to technology.

But, where does Edmonton fit into the equation? It would be foolish to think we can fully take advantage of every part of the value chain and every possible spin-off industry, so we should be thinking strategically and with respect to Edmonton’s existing competitive advantages. Better to focus on our own corner of the cannabis industry, where we can truly excel.

So, what are our competitive advantages? As a prairie province, the cultivation and harvest of cannabis has potential in Alberta. We are already starting to see this with Aurora Cannabis Inc. planning to build their 800,000sq. ft. production facility in Leduc County – which will be the world’s largest legal cannabis grow operation.

This will also mean a large, local supply of cannabis for those who want to create edibles. Considering Edmonton already has expertise in food processing, being a hub of food manufacturing activity for the province, claiming the edibles market is a no brainer. And make no mistake – the edibles market has the potential to be huge business. How edibles will fit into the Government of Canada’s legalization framework is currently unclear: the government has said that it will bring edibles into the legal market once regulations for more straightforward production and sale are developed.

When cannabis was legalized in Colorado the edibles market became much larger and much more successful than the state originally anticipated. According to the Colorado Cannabis Chamber of Commerce, edibles make up roughly 45 percent of the billion-dollar legal cannabis marketplace in Colorado.  The popularity of edibles in Colorado could be due to a variety of reasons, although many sources believe the number one reason is the desire to consume cannabis without the harmful effects of smoking. Another reason is that edibles are much easier to consume for those who are new to cannabis consumption. Regardless of the exact cause of their popularity, it stands to reason that edible products, if and when they become legal, will be just as popular in Canada.

Until concrete regulations are released relating to the production of edibles, it is hard to make definitive assumptions on Edmonton’s ability to make a name for itself in this market. Assuming legislation makes edibles open for business it could become a great opportunity for the city. However, this will require a concerted effort on the part of the regional business community to make sure that the Edmonton region is ready by anticipating and addressing potential barriers to our future success in the industry.