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The Conference Board of Canada and The Globe and Mail are partnering to explore the relationship between career success and cannabis use. Employers and employees (both recreational and medical cannabis users, as well as non-cannabis users) are invited to participate in this study. (Employees interested in taking the survey can click on this link. Employers interested in taking the survey can click on this link.) The data from these surveys will be aggregated and used to conduct analysis and create a report that will be presented Oct. 15, 2019, at a conference at The Globe and Mail Centre in Toronto.

While the cannabis industry is just getting off the ground in Canada, it has already become a major part of our economy. The first batch of economic information released since recreational use was legalized shows that more Canadians are consuming cannabis and the industry is ripe for growth.

Awareness

Some people may be surprised by how many Canadians are consuming cannabis. According to the latest data from Statistics Canada, almost 18 per cent of Canadians over 15 years old used cannabis in the first few months of 2019. This is up from 14 per cent before legalization.

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Men are the biggest consumers, with 22 per cent reporting consuming cannabis – nearly double the share of women (13 per cent). Consumption is also higher among younger Canadians. Among young people (aged 15 to 24), 30 per cent reported consuming cannabis. The share drops to 24 per cent for those 25 to 44 and then declines significantly for those older than 45.

Given that more Canadians are consuming cannabis, it’s not surprising that spending has also risen substantially. Canadians now spend as much on cannabis as on wine. According to the latest numbers, Canadians spent almost $2-billion on non-medical cannabis in the first quarter of 2019, putting sales on track to top estimates of $7-billion this year. That would be a third of the amount spent on alcoholic beverages in 2018.

Spending at retail cannabis stores has also been increasing quickly. In March, Canadians spent an average of $2 for every adult in the country. Adjusted for the number of people over 18 in each province, adults living in Yukon spent the most per person on cannabis, followed by those in Prince Edward Island. Adults in Ontario and British Columbia spent the least per person, but this will likely change; the first storefront retailers in Ontario only opened in April.

Legalization is almost certainly helping to boost consumption and spending, but it’s probably not the only factor. Consumers paid an average of about $7 a gram in 2018, down from $9.40 in 2008. When adjusted for inflation, this plunge is stunning; a gram of cannabis now costs less than one-fifth of 1961’s price. Cannabis has never been cheaper.

Accountability

While there has been a rapid shift in the market recently, legal cannabis sales are still less than half of all purchases. One reason for this could be the higher prices charged by legal suppliers. Those who purchased from illegal sources paid on average $6.37 a gram, compared to $9.99 from legal outlets.

Despite the price difference, the licensed industry is growing. There are now more than 260 companies operating in the cannabis industry, according to Statistics Canada. While most are in agriculture or retail, some are in manufacturing as well. Over all, the cannabis industry was responsible for $6.7-billion in GDP as of March. While the licensed industry made up only $2.3-billion of that total, this share has been rising and will likely continue to as consumers shift toward legal sources. Between January and March, roughly 2.5 million consumers purchased cannabis from a legal vendor, up from 954,000 over the same period in 2018.

Action

While there are economic benefits to more people consuming cannabis, such as generating new revenue, the social cost and societal impact will only become apparent in the coming years. As will the effects for employers.

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Employers should not ignore the negative consequences cannabis may bring to their workplaces. The fact that employers don’t see anything yet doesn’t mean risk is not mounting. This is especially true given that 514,000 employees in Canada, about 13 per cent of the work force, used cannabis before or during work in the first few months of 2019.

What does this mean for your organization? Employers need to consider whether increased cannabis consumption can have a negative impact on employees’ health, safety and productivity. They should ask themselves these questions:

  • Is cannabis consumption affecting productivity?
  • What are the health and safety risks for employees?
  • What is the financial risk for regular consumers of medical or recreational cannabis?

The industry is growing and employers have a responsibility to keep their staff safe. The best way to get started is to be informed.

Bill Howatt is the Head of Research, Workforce Productivity at The Conference Board of Canada.

Matthew Stewart is the Director of the National Forecast Research Group at The Conference Board of Canada.

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