1. introduction
The legalization of cannabis in Canada is more than a decade old and represents a significant milestone for global drug policy. Implemented in October 2018, legalization sought to reduce organized crime, protect public health and generate economic revenue. This case study examines the impacts of this decision, addressing economic, social and public health changes, as well as reflecting on what Brazil can learn from this experience.
Since its implementation, Canada has become one of the most watched countries globally when it comes to cannabis regulation. The results of this policy offer valuable insights for nations considering following suit, highlighting both the benefits and challenges faced during the process.
2. The Cannabis Legalization Process in Canada
2.1 Timeline of Legalization
The legalization process in Canada began with debates in mid-2015, culminating in the passing of the Cannabis Act (Bill C-45) in 2018. The aim was to regulate the production, distribution and consumption of cannabis for recreational and medicinal purposes. This decision was driven by a series of studies highlighting the negative impacts of criminalization and the potential for economic benefits.
The advancement of the legislation was supported by the government of Prime Minister Justin Trudeau, who stressed the importance of a regulated market to protect young people and eliminate the illegal market. The process involved public consultations, impact assessments and parliamentary debates, reflecting Canada’s commitment to establishing an evidence-based drug policy.
2.2 Regulatory structure
The federal government has established general guidelines, while provinces and territories have defined specific rules, such as minimum age of consumption and places of sale. The Canadian model is decentralized, allowing for regional adaptations to meet local needs. For example, some provinces allow sales in private stores, while others maintain state control over distribution.
This approach allowed for significant flexibility in the implementation of the policy. Some provinces adopted more restrictive models, such as Quebec, which limited the number of stores and established strict rules for advertising. In contrast, provinces like Alberta have opted for a more liberal market, with a greater presence of private stores and ease of access. This diversity of policies is reflected in the different product offerings, covering cannabis for medicinal use, recreational use, cosmetics, food and industrial applications such as textiles and bioplastics. This has resulted in a variety of experiences within Canada itself, offering a living laboratory for studying the impacts of legalization.
3. Economic Impacts of Legalization
3.1 Cannabis Market Growth
In 2024, the legal cannabis market in Canada exceeded CAD 10 billion in annual revenues, with a cumulative growth of more than 200% since 2018. The country has also become one of the largest exporters of medical cannabis in the world, boosting the economy.
This growth has been driven by a combination of factors, including the expansion of production infrastructure, increased social acceptance of cannabis and the development of new products. The sector has become an important economic engine, contributing to GDP growth and the diversification of the Canadian economy.
According to Sechat, the cannabis sector has generated more than CAD 15 billion in tax revenue and more than 151,000 direct and indirect jobs since legalization.
3.2 Generating Jobs and Business Opportunities
Legalization has created more than 150,000 direct and indirect jobs in the cannabis sector, including cultivation, distribution, research and related services. Adjacent sectors, such as logistics and technology, have also benefited.
In addition to the jobs directly related to the production and sale of cannabis, the sector has generated opportunities in areas such as marketing, scientific research and the development of new products. This has contributed to the creation of a robust ecosystem, with a positive impact on various areas of the Canadian economy.
3.3 Tax Collection and Fiscal Impact
The Canadian government collected more than CAD 3 billion in cannabis-related taxes in the first five years. These funds were earmarked for public health, education and safety programs.
The tax revenue not only generated significant income for the government, but also allowed for investments in harm reduction programs and public education. This has contributed to a more balanced approach to drug policy, with a focus on both health and public safety.
According to Fast Company Brasil, the Canadian cannabis market was worth approximately US$4.2 billion in 2023, and is expected to reach US$5.63 billion in 2024.
4. Social and Public Health Impacts
4.1 Reducing Cannabis-related Offenses
There has been a reduction of more than 50% in offenses related to the possession and use of cannabis. Legalization has contributed to relieving the judicial system, allowing it to focus on more serious crimes.
This change has resulted in a significant reduction in the costs associated with law enforcement, as well as relieving the prison system. The positive impact was particularly evident in communities that previously faced disproportionate rates of cannabis-related criminalization.
4.2 Cannabis use and social behavior
Consumption increased moderately among adults, but remained stable among young people, disproving fears of an uncontrolled increase. Education campaigns have helped to promote responsible use.
Research indicates that legalization has not led to a significant increase in consumption among adolescents, one of the main arguments against it before the policy was implemented. This highlights the importance of well-structured education and prevention strategies.
4.3 Public health and safety
The impact on public health has been mixed. Although there were concerns about traffic accidents related to cannabis use, awareness programs reduced these risks over time.
Studies have shown a slight rise in traffic accidents initially, followed by a stabilization, suggesting that the public has adapted to the new reality. Awareness programs about the risks of driving under the influence of cannabis have been crucial in mitigating this impact.
5. The Cannabis Products Market
Canada has significantly expanded its portfolio of cannabis-based products, taking advantage of regulatory flexibility to diversify the offer and cater to different audiences. Products include:
- Dried flowers and oils: The traditional basis of the market, used for both recreational and medicinal consumption.
- Edibles and infused drinks: These include chocolates, gummies, cookies and non-alcoholic drinks, with growing popularity among consumers who prefer to avoid smoking.
- Wellness products and cosmetics: creams, lotions, body oils and skin and hair care products, highlighting the potential of cannabis in the beauty industry.
- Capsules and concentrates: Aimed at the medicinal public seeking precise dosage control.
- Veterinary products: Items aimed at animal welfare, especially for controlling pain and anxiety in pets.
Diversified consumption has driven innovation and economic growth, with Canada emerging as a hub for cannabis product development. Canadian companies are leading the development of new products, exploring niche markets and expanding internationally. The sector has attracted significant investment, fostering entrepreneurship and generating jobs in areas such as research, product development, marketing and logistics.
6. Challenges and Adjustments in Legalization Policy
Despite progress, Canada has faced significant challenges in implementing the legalization of cannabis:
- Persistence of the illegal market: Although reduced, the illegal market continues to compete with the legal one, especially due to lower prices and greater accessibility in some regions.
- Regulatory barriers for small producers: Many small businesses face difficulties in complying with strict regulatory requirements, limiting their competitiveness against large corporations.
- Regional inequalities: Decentralized regulation has resulted in disparities in product availability and access, depending on the province.
- Public health issues: Challenges related to increased use in some age groups and the continued need for education and awareness programs on responsible use.
- Export difficulties: Regulatory restrictions and trade barriers make international expansion difficult for some Canadian producers.
These challenges highlight the importance of a flexible and adaptive approach to public policy-making. Continuous learning and the ability to adjust regulation have been key to the success of legalization in Canada. The Canadian government continues to review and adjust policies to balance economic growth with protecting public health and controlling the illegal market.
7. What Brazil Can Learn from the Case of Canada
7.1 Similarities and Differences
Brazil can adapt Canada’s lessons, taking into account its cultural and economic specificities. The potential for job creation and revenue is significant. In Canada, the legal cannabis sector has created more than 151,000 direct and indirect jobs and generated more than CAD 15 billion in tax revenue since legalization(Sechat). Brazil, with its robust agricultural economy, could surpass these figures due to its favorable climate and vast territorial extension.
Although the socio-economic and cultural contexts are different, the Canadian case offers valuable insights into how to structure a cannabis regulation policy in an effective and sustainable way. The decentralization of regulation, for example, has allowed Canada to adapt regional policies to meet local needs, an approach that could benefit Brazil, considering its regional diversity.
7.2 Opportunities for Brazil
Regulation could benefit sectors such as health, agriculture and industry, as well as reducing the impact of organized crime. The Brazilian medical cannabis market is already showing growth, with a significant increase in the number of patients using cannabis-based products, estimated at more than 100,000 patients by 2023 (Anvisa).
Brazil has immense agricultural potential, which could be used to grow cannabis on a large scale, contributing to economic development and job creation. Studies indicate that regulating cannabis could generate more than 300,000 direct and indirect jobs in Brazil and billions in tax revenue, as well as boosting adjacent sectors such as pharmaceuticals and biotechnology.
7.3 Help Boost Brazil’s Regulation, Supported by Good Practices with Kanna
Kanna can play a key role in advancing cannabis regulation in Brazil, promoting good practices based on evidence and the success of countries like Canada. The Kanna protocol is a powerful tool to help regulate and map the cannabis production chain, providing greater transparency and security for investors, producers and consumers.
Kanna’s protocol allows complete traceability of production, from cultivation to the end consumer, ensuring compliance with regulatory standards and facilitating quality control. In addition, it can support the development of public policies by providing accurate data on cannabis production and consumption in Brazil, which is crucial for effective and sustainable regulation.
Through Kanna, Brazil can establish a legal cannabis ecosystem based on international best practices, promoting innovation, sustainability and economic development, while protecting public health and combating the illegal market.
8. Conclusion
The case of Canada shows that the legalization of cannabis can have a positive impact on various sectors, from the economy to public health. Brazil has a unique opportunity to learn from this experience in order to implement an effective and sustainable regulatory policy.
By adopting an evidence-based approach adapted to the local reality, Brazil can reap the benefits of cannabis legalization, promoting economic development and social well-being.
