A new report highlights the economic impacts of cannabis legalization in Canada and Ontario.
The cannabis industry contributed $76.5 billion to Canada’s gross domestic product (GDP) and $23.1 billion to Ontario’s GDP between legalization in 2018 and 2024, according to a new report from the Ontario Cannabis Store (OCS) and Deloitte.
Additionally, the legal cannabis sector sustained approximately 98,200 jobs annually across the country, with about one-third (31,900) located in Ontario.
The report, Six Years of Legalization: The Economic and Social Impact of Canada’s Cannabis Sector, was released on August 13, 2025, and was prepared by OCS in collaboration with Deloitte Canada. It is a follow-up on a similar report in 2021 that looked at the first three years of the legal cannabis industry in Canada and Ontario.
The report also looks at the economic impact in Mississauga, one of Ontario’s largest cities, which began allowing retail cannabis stores in 2023. Furthermore, it highlights some of the socioeconomic impacts of legalization and the industry.
Ontario’s contribution to Canada’s cannabis economy
The industry has contributed $76.5 billion in GDP gains for Canada since legalization. Over half ($43 billion) of this came from labour income, directly and indirectly supporting 98,200 jobs annually over six years.
Total cannabis sales in Canada went from just under $1 billion in the first year of legalization to $5.8 billion by 2024, driven by growth in the adult-use “recreational” market, while the medical market has seen small but consistent annual declines. Recreational sales levelled off in 2024, remaining at about $5.4 billion, the same as 2023.
Similarly, Ontario’s cannabis market has grown considerably since legalization came into force in October 2018, from $300 million in the first year to $2.2 billion in 2023 and 2024. Similar to the national market, sales of medical cannabis have declined in Ontario since 2018.
Over those six years, the industry has generated an estimated cumulative amount of $28.7 billion in sales across Canada, with recreational sales accounting for nearly 87%. This represents a 25-fold increase in sales over six years. Recreational cannabis sales in Ontario were estimated as $11 billion between 2018 and 2024, representing about 39% of the entire market in Canada.
The cannabis industry has spent an estimated $42 billion across Canada in the first six years of a legal cannabis market, with $11.6 billion of that spent in Ontario. The majority of these expenditures, both nationwide and in Ontario, peaked in 2019 at $15.3 billion and $4.7 billion, respectively. By 2024, these figures had significantly dropped to $500 million and $100 million
Cannabis jobs and cannabis taxes
Ontario’s cannabis industry has contributed $23.1 billion to provincial GDP over the first six years of legalization, sustaining some 8,600 jobs annually. Approximately one in three jobs directly sustained by Canada’s cannabis industry are located in Ontario.
For every one dollar of revenue generated, the cannabis industry adds around $1.08 to Canada’s GDP or $1.01 to Ontario’s.
Of the $76.5 billion the cannabis industry has contributed to Canada’s GDP, $16.6 billion was a direct contribution, while $43.1 billion was indirect, and another $16.8 million was induced.
The $43 billion in labour income was broken down into $8.3 billion (direct), $26.9 billion (indirect), and $7.8 billion (induced).
The cannabis industry also contributed significant tax revenue to provincial and federal governments. Since 2018, the report estimates $29.6 billion in government tax revenues for Canada and $5.3 billion in tax revenue for Ontario.
The federal government applies a $1-per-gram excise tax on cannabis sold into provincial markets, with 75% of that revenue directed to the province where the cannabis is sold. Ontario’s share of the Federal Cannabis Excise Duty from 2022-2024 totaled $656 million ($310 million in 2022-23 and $346 million in 2023-24). The province projects an additional $376 million for the 2024-2025 fiscal year.
Expenditures from cannabis producers and retailers across Canada have generated $3.6 billion in direct taxes, $10.5 billion in indirect taxes, and $6.6 billion in induced taxes. Consumers contributed an additional $8.9 billion in sales and excise taxes.
In Ontario, cannabis producers and retailers generated around $400 million in direct taxes, another $1.4 billion in indirect taxes, and $1.2 billion in induced taxes. Consumer purchases in the province, combined with cannabis producer spending in Ontario, contributed another $2.3 billion in sales and excise tax revenue.
Mississauga’s sales skyrocket
The Deloitte/OCS report also highlights the impact of new municipalities allowing cannabis sales in the years following legalization. While retail stores were first allowed in Ontario in 2019, some cities and towns opted out of allowing applications. In April 2024, the City of Mississauga, currently the fourth-largest city in the province, began allowing applications for privately owned retail stores.
Around the same time, notes the report, several other cities opted in as well, like Ingersoll, Muskoka Lakes, and Chapeau, with about 94% of municipalities in Ontario now opting in (392 in total).
Within the first year of Mississauga allowing applications for cannabis stores, around 40 locations opened, collectively bringing in around $24.1 million in wholesale sales from OCS. By March, there were about 60 stores in Mississauga with about $5 million in wholesale sales.
Since the city began allowing retail stores, OCS wholesales cannabis sales to retailers in Mississauga were more than $69 million. Surveys of cannabis consumers in Mississauga, taken before and after legal stores were allowed, showed the percentage of residents who reported obtaining their cannabis entirely or mostly from the legal market increased from 62% in Spring 2023 to 80% just nine months later.
These figures highlight not only the increase in legal sales in the city, but also that these sales are coming at the expense of illicit retailers rather than solely from legal stores in neighboring communities. Rather than consumption appearing to go up since legal stores were allowed in the city, it appears it’s largely shifting existing consumers to those legal stores.
Despite this market growth, OCS estimates that 27.8% of cannabis sales in the province took place in the illicit, unregulated market in 2024-2025. Many retailers have expressed frustration at the recent proliferation of unlicensed stores in major cities in Ontario, only a handful of which have faced enforcement actions.
Indirect economic benefits
In addition to its direct economic impact in Canada and Ontario, the cannabis industry also serves as a catalyst for many other industries. Producers often have a large demand for electricity and natural gas, and transportation and warehousing services help fill the gap between production and sale. The industry also benefits the financial and insurance industries, as well as public relations marketing, sales and more.
With $5.9 billion in sales generated in 2023, Canada’s cannabis industry is the second largest in the world, behind the $38 billion in collective sales in various US states. The rest of the world combined only accounted for another $3.1 billion out of an estimated potential of $47 billion
Diversity in the Canadian cannabis industry
As of September 2024, 5.6% of Canada’s more than 900 licensed cannabis producers identified as being Indigenous owned, similar to the 5% of Canadians who identify as Indigenous.
Despite this relatively even distribution, the report notes that many of the licenses are smaller facilities like micro cultivators, micro producers, and nurseries, representing a smaller share of the overall market size, due at least in part to a lack of financial capital. Despite their much smaller size, though, micro producers represent about half of all active production licenses in Canada.
Less than 1% of nearly 2,000 cannabis stores in Ontario are Indigenous-owned (11 stores).
Although there has not been much recent polling on the matter, a 2020 study showed that of publicly-listed licensed producers in Canada (which are only a portion of the country’s nearly 1,000 cannabis production licenses), 72% had executives or directors who were white males, and 12% who were white females. Only 165 of such positions at these publicly-listed companies identified as non-white.
Indigenous-owned case study
Highlighting one of these 11 stores, the report also includes a case study on an Indigenous-owned licensed retail store in Ontario. The Reef Store, a First Nation-owned and operated authorized retail store in the Kenora area near Ontario’s border with Manitoba, opened in 2020, the first of three stores in the area and the only one located within the Anishinaabe of Wauzhush Onigum community. It is owned and operated by the Nation, with profits benefiting different community initiatives like sports and recreation for young people, a local fishing derby, and a community powwow.