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Editorial: What are cannabis business boom costs?

The promise of a new multibillion-dollar industry in Canada has thus far occupied much of the cannabis legalization limelight.
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The promise of a new multibillion-dollar industry in Canada has thus far occupied much of the cannabis legalization limelight. And why not? A lot of dollars have been, or are poised to be, invested in core and support enterprises in cannabis production and sales.

New Frontier Data, which claims to be the global authority in data, analytics and business intelligence for the cannabis industry, notes in its Canada Cannabis Report: Industry Outlook 2018 that the market for annual consumer sales in Canada in 2018 is around $8.6 billion. That number, the report estimates, will grow to $9.2 billion by 2025.

For cannabis producers and sellers, that is encouraging. But in other areas of the business world, the new cannabis reality is far less appealing.

Some of the cannabis multi-billions will come from consumers of medicinal marijuana. Many more, however, will come from recreational users, whose numbers will be represented at all levels of the talent pool.

What effect the addition of another intoxicant will have on workplace safety and productivity in Canada is unknown. But the erosion of one or both will not be good news in a country that is already struggling with mediocre productivity and inflated levels of economic entitlement.

How Canada Performs: Innovation, the Conference Board of Canada’s most recent innovation report, has downgraded the country’s innovation ranking to 12th among 16 peer economies – a drop of three ranking spots from the board’s previous report. B.C., meanwhile, fell seven ranking positions, and its letter grade slipped to a D from a B. The measurements bode ill for competing effectively in the wider world. 

Canada might be ahead in cannabis business enlightenment, but it has yet to come to grips with how it will address the human resources side of the cannabis equation.

Cannabis business costs and complications have the potential to outweigh the windfall profit the sector promises to generate.