This day, Wednesday, Oct. 17, 2018, is a historic one: Canada’s legal adult-use marijuana market is officially open for business, a move that’s been in the works since the 2015 election of Prime Minister Justin Trudeau.
With that, Canada becomes the largest country in the world (by population, and the first G7 nation) to fully legalize. But the truth is, it’s not even the largest single cannabis-friendly entity on the North American continent.
That distinction still belongs to the state of California.
The Great White North is going green a mere 10 months after California – barely a blip in the course of history – and the parallels don’t end there. But for every striking similarity (our population sizes are nearly identical!), there is a vast difference (edibles aren’t allowed there?).
Here’s a look at how California’s cannabis market compares with our neighbors to the North:
Advantage: Call it a draw. Even in census years, exact population figures are hard to pin down – but this couldn’t be any closer. California has a slight edge, but we’re practically the same!
CANADA: 3.855 million mi², the second-largest country in the world.
CALIFORNIA: 163,696 mi², the third-largest state in the Union (behind Alaska and Texas).
Advantage: Canada, by a … wait for it … landslide. As huge as California is, it can’t compete with all that tundra.
Gross Domestic Product.
CANADA: $1.53 trillion USD (2016)
CALIFORNIA: $2.448 trillion USD (2017)
Advantage: California. Let’s face it, it’s tough to grow almonds and avocados in that northern climate. Even tougher to get movie stars to come out of their trailers.
Most famous cannabis-growing region.
CANADA: British Columbia.
CALIFORNIA: Humboldt County.
Advantage: Too close to call. “Humboldt County” has been on the lips and in the imaginations of American cannabis enthusiasts for decades; who didn’t dream of someday getting their hands on sticky bud from the beating heart of the mythical Emerald Triangle? Waaaay up the coast, the hilly BC wilds, rich in water, sunshine and cheap hydroelectric power, has been producing nearly half of Canada’s cannabis for time immemorial. Both are legendary, and both will be a huge part of the legal market for generations to come.
Most famous cannabis strain.
CANADA: Island Sweet Skunk, God Bud, Chemo … and many more.
CALIFORNIA: Blue Dream.
Advantage: California, by default. Blue Dream – the “Bud Light” of weed – is an enormously popular classic strain from mysterious West Coast origins whose genes and legend have since spread the world over. Canadian growers largely kept their most famous strains to themselves, and while they’re undeniably wonderful in their own right, none among them has achieved the same level of global fame as Blue Dream.
Medical marijuana experience and market size.
CANADA: Since 2001 = 17 years.
CALIFORNIA: Since 1996 = 22 years.
Advantage: California, though only by five years – not a hugely significant head start. Seen through another lens, this becomes a rout: California’s medical marijuana retail market in 2017, the year before legalization, was an estimated $3 billion (U.S.) according to BDS Analytics, while Canada’s was around $250 million (U.S.) – about 1/12th the size – in that same year, according to Marijuana Business Daily. But don’t let that discrepancy – largely driven by a thriving black market up north – fool you: Canada’s Parliamentary Budget Officer has projected that Canada’s fully legal market could be around $4 billion (median) or bigger in its first year alone, while California’s is estimated to come in slightly lower, around $3.4 billion. It’ll be a horse-race, but Canada seems to have a slight edge in the early goings.
CANADA: Federal excise taxes are paid when a producer delivers to a distributor, and are then baked into the retail price. In most provinces, that comes out to a flat rate of $1 per gram, or 10% of a product’s price, whichever is higher. Add on provincial and municipal taxes that can range up to 15%, and you’re in the ballpark of a 25% markup, max.
CALIFORNIA: Multiple layers of taxes up and down the supply chain from cultivators to retail, including a cultivation tax, a state excise tax based on wholesale prices, a sales tax at retail, and the potential for local taxes from counties and cities. All together, it can add 30%-40% to retail prices, although some is baked into the price – so it’s not as apparent to consumers.
Advantage: Canada. That’s right, for the time being, tax rates are better in Canada. Give that a minute to sink in. For a full explanation of California’s cannabis tax structure, click here.
CANADA: Flower, seeds, plants and oil only. For now, that’s it – though edibles and concentrates are expected to be legal by this time next year.
CALIFORNIA: Flower, seeds, plants, oil, edibles, concentrates, topicals, beauty products, infused beverages – if you can imagine it, it’s probably legal in California.
Legal age for consumption.
CANADA: 19 in most provinces, 18 in Quebec.
CALIFORNIA: 21 for adult use (18 with certain medical exceptions/doctor’s recommendation).
Advantage: Depends entirely upon your view; some Canadian provincial politicians have vowed to raise the age to 21 as soon as possible. And the amount you can possess is essentially the same – an ounce in California, which is just slightly less than the 30 grams allowed in Canada.