The legalization of cannabis in 2018 has been effective at displacing the illicit cannabis market in Canada, says a new research paper.

The paper, published in the International Journal of Drug Policy, from researchers at the Peter Boris Centre for Addictions Research and St. Joseph’s Healthcare Hamilton, explores the association of recreational cannabis legalization with changes in medical, illegal, and total cannabis expenditures in Canada.

Sales of illicit cannabis fell significantly immediately following the legalization of cannabis for non-medical purposes (recreational) in late 2018, and five years later, legal sales represented 72% of the market according to surveys conducted by the federal government (researchers note these figures contain some uncertainty).

In addition, legal recreational sales have eaten significantly into sales of cannabis for medical purposes, with medical sales representing just 3.7% of total cannabis sales in Canada five years into recreational legalization. Lastly, the amount of money Canadians report spending on cannabis has increased by 75% since legalization, something researchers say could represent negative public health consequences for Canada.

However, the research paper also notes that the 75% increase in overall cannabis-related expenditures could also somewhat highlight an increase in spending due to crude price adjustment as consumers choose more expensive products, and not entirely an increase in the volume of cannabis purchased. 

Medical cannabis represented 11.8% of the market, and illegal cannabis 88.2%, immediately prior to the legalization of non-medical cannabis in 2018. After five years, medical cannabis represented only 3.4% of cannabis sales, and illegal cannabis represented just 24.4%.

Researchers measured the impact of cannabis legalization on the medical market and the illicit cannabis market by cross referencing data from the Canadian Community Health Survey, the Canadian Tobacco, Alcohol, and Drugs Survey, and the National Cannabis Survey, as well as a combination of national survey data and previous literature indicating the average frequency of use and the average amount used for each level of cannabis use frequency.

Although overall rates of reported cannabis use have increased since the beginning of legalization, rates of use among young people have not reflected this increase, with some research even showing declines. Researchers have said that incidences of problematic use also show no signs of increase. 

“Recreational cannabis legalization in Canada appears to be achieving one of its primary goals by displacing the illegal cannabis market,” concludes the paper, to be formally published in May.  

“However, the medical cannabis market has also been displaced, meaning less clinical oversight. Moreover, the overall cannabis market in Canada has grown substantially in the first five years of legalization, suggesting consumption has increased at the population level. Caution should be used in interpreting these findings given uncertainty in data quality, particularly for illegal cannabis expenditures (and overall expenditures by extension). Continued monitoring of cannabis consumption at the population level is necessary to ensure the increases observed in this study do not contribute to a greater burden of cannabis-related harms in Canada.”

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