Course:CONS200/2024WT1/Not all green is good: Canada’s cannabis industry and its environmental impacts

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Introduction

Canada’s cannabis industry represents a complex interplay between economic progress, social change, and environmental challenges. Over the past century, the country has transitioned from strictly prohibiting cannabis in 1923 to becoming the first nation to fully legalize recreational use in 2018. This transformative journey reflects shifts in public opinion, cultural movements, and the growing recognition of cannabis as a medical and economic resource. While legalization has positioned Canada as a global leader in cannabis reform, the industry has introduced a mix of opportunities and concerns.

On one hand, the economic impact of cannabis legalization has been profound. The industry has contributed billions to Canada’s GDP, created over 150,000 jobs, and generated significant tax revenue to support public services. However, these benefits come with challenges, including labor issues such as precarious employment and poor working conditions, deepening unequal treatments between groups as well as public health concerns around substance misuse and impaired driving.

Furthermore, the cannabis industry’s environmental footprint is substantial, with high water usage, pollution, and greenhouse gas emissions posing threats to ecosystems. Issues such as soil erosion, air pollution, and illegal cultivation practices highlight the need for sustainable cultivation methods and stricter regulations.

This introduction provides a foundation for exploring the historical, economic, social, and environmental dimensions of Canada’s cannabis industry. As the sector continues to evolve, balancing economic growth with public welfare and environmental sustainability will be crucial to ensuring its long-term viability and success.

History of Canada’s Cannabis Industry

2018 Legal Recreational Cannabis Purchase in Canada

Canada's cannabis industry has had a tumultuous 100-year history. Canada was one of the world's leaders in criminalizing cannabis in the early fight against drugs.  In 1923, cannabis was first added to Canada's list of prohibited substances under the Opium and Narcotic Drug Act, and the use and possession of cannabis was criminalized[1]. The rise of cannabis use in Canada began in the 1960s, growing alongside the counterculture movement. It was during this period that the drug became associated with rebellion and one through which many young Canadians sought self-discovery[2][3]. By the late 20th and early 21st centuries, public opinion in Canada shifted, with growing support for decriminalization and recognition of cannabis for medical use. The movement of medical cannabis in Canada started in the 1990s. Patients suffering from chronic pain, cancer, and other conditions began to advocate for cannabis as a treatment option. As a result, some doctors began prescribing cannabis for medical purposes[1]. This growing support led to the establishment of the Senate Special Committee on Illegal Drugs in 2001[3]. Later that year, the Marihuana Medical Access Regulations were introduced, permitting legal medical cannabis use for patients with specific medical conditions[1]. In 2018, Canada became the first country in the world to fully legalize non-medical cannabis under the Cannabis Act, which aims to reduce illegal market activity, restrict access among youth, and regulate the industry for adult use [4].

The economic contribution from the cannabis industry

Nationwide Economic Impact

Since the legalization of recreational cannabis in Canada in October 2018, the industry has significantly boosted the national economy. Between 2018 and 2021, cannabis contributed approximately $43.5 billion to Canada’s GDP, supported 151,000 jobs, and generated $15.1 billion in tax revenue for federal, provincial, and municipal governments[5][6].

Taxation and Revenue Generation

Cannabis is subject to multiple layers of taxation, which vary across provinces and territories. Excise taxes, GST, and provincial or territorial sales taxes are applied to cannabis products, contributing substantially to government revenue[7][8].

Government tax revenues supported by Canada's cannabis sector | 2018-2021

Specialized Roles and Industry Influence

The cannabis industry involves a mix of regulated and unregulated businesses, creating numerous specialized roles, from crop development to retail management. Its economic influence extends to sectors such as construction, retail, and distribution, driven by high demand for infrastructure and operational services[5].

Growth in Legal Retail Sales

Legal retail cannabis sales have experienced consistent growth, increasing from $148 million in December 2019 to nearly $355 million in December 2021[9]. This steady expansion highlights the growing consumer market and the economic potential of the regulated cannabis sector.

Regional Contributions: Focus on British Columbia

In British Columbia (B.C.), cannabis production and retail have been significant economic contributors. In 2019, the industry added approximately $2.4 billion to B.C.'s GDP and has consistently contributed over $2 billion annually to local economies. However, a portion of economic activity still occurs in unlicensed markets[10].

Consumer Demographics and Market Insights

The demographic profile of cannabis consumers in B.C. reveals diverse consumption patterns. According to the Canadian Cannabis Survey 2022, a greater percentage of males (29%) reported daily or almost daily use compared to females (21%). Additionally, younger age groups, particularly those aged 18 to 24, have higher rates of cannabis consumption[11].

Impacts of the Cannabis Industry on Social

Public Safety

The cannabis industry has mixed effects on the public. On one hand, legalization has provided economic benefits, however, public concerns arise, such as increased access leading to potential substance misuse and challenges related to impaired driving[12]. Also, research in BC shows that the use of cannabis has been associated with homelessness, exposure to trauma, involvement with the criminal justice system, teenagers' IQ reduction[13] and a history of lifetime depressive disorders[14]. The public may also face noise pollution and increased energy consumption associated with indoor cannabis cultivation facilities[15].

Vulnerable Groups

Despite the legalization of cannabis in Canada, the policy has not only failed to reduce inequality but has even exacerbated the disparities between racialized communities and more privileged groups. Research into the experiences of racialized individuals reveals that they continue to face discrimination, bias, and unequal treatment when it comes to cannabis use[16] The legalization of cannabis in Canada becomes an extension of the systemic racism that was entrenched during the prohibition era[17]. In the United States, the enforcement of cannabis laws can vary, leading to unequal arrest and incarceration rates for communities of colour[18].

Labour Issue

Labour issues in the cannabis industry include poor working conditions, low wages, and limited job security. Many employees in this sector, especially those working in cultivation, processing, or retail, report precarious employment with few protections or benefits[13]. Seasonal and part-time roles dominate, making it challenging for workers to secure stable income[19]. Additionally, the lack of unionization and workplace safety is concerning, particularly in indoor facilities where air quality and chemical exposure can pose health risks[20]. Ensuring fair labour practices and improving working conditions is a growing concern as the industry expands.

Potential Solutions

Mitigating these issues requires stronger regulatory frameworks focused on public health and labour protections.

  1. Treating different groups fairly based on the law, and preventing further division from becoming more severe.
  2. Targeted education campaigns and stricter rules on impaired driving could minimize negative impacts.
  3. From a labour perspective, promoting unionization and establishing clearer workplace standards could improve working conditions.
  4. Collaboration between industry stakeholders and local governments can address environmental and social concerns effectively, balancing economic growth with sustainability and worker rights.

Impacts of the Cannabis Industry on the Environment

Water Usage and Pollution

Cannabis industries in Canada present significant environmental challenges, particularly concerning water resources. Compared to other crops like maize, soybean, and wheat, cannabis requires approximately twice the amount of water in a single growing season[15]. This high demand for water could deplete local resources, potentially allowing for the cultivation of double the food with the same water supply if cannabis were not grown. Also, the high usage of water can cause problems for fish because it will change the stream flow and aquatic ecosystems because of the water they consume, particularly affecting sensitive species such as fish and amphibians[15]. No data is available for Canada yet but a case study in Northern California is a good reference[21]. It shows that there are 80%–116% increases in cannabis cultivation sites near high-quality habitats.

Cannabis industries often contribute to water pollution, especially those illegal outdoor cannabis cultivation sites on public land. In these industries, water is usually obtained from the underground water resource without permission, and toxic, unauthorized pesticides are often used[19]. Cannabis requires a large amount of nitrogen, phosphorus, and potassium which leads to fertilizer usage increased[15]. The excess chemistry components can run into nearby water bodies and can be toxic to species

Air Pollution

Cannabis cultivation in Canada also has implications for air quality, both indoor and outdoor. Outdoor cultivation emits volatile organic compounds (VOCs), which play a crucial role in forming ozone and particulate matter[19]. The increase in ozone will amplify the greenhouse effect and climate change impact. Also, particulate matter can cause respiratory diseases. Indoor cultivation also consumes significant amounts of energy for lighting and precise microclimate control[15]. What is worse, growing cannabis in Canada emits more greenhouse gases compared to the US, because of Canada’s colder climate and higher latitude[22]. Even though cannabis is an effective carbon-depositing crop[23], its processing involves significant GHG emissions. Producing one kilogram of processed cannabis indoors will release 4.6 tons of CO2 into the atmosphere[24], this emission is equal to one passenger vehicle driving 11,414 miles[15]. Last but not least, on the usage side, smoking cannabis can cause a proximity effect which means producing secondhand smoke and worsening the indoor air quality[25].

Soil Erosion and Land Degradation

Soil erosion is another major concern associated with cannabis cultivation in Canada. The clearing of land for cannabis production disrupts native vegetation and exposes soil to erosion from wind and rain. In an example from Humboldt County California, 22% of cannabis cultivation is on steep slopes[20]. Due to gravity, water flows at a higher speed on steep terrain, making it easier to wash away topsoil and increasing the risk of erosion, sedimentation, and landslides. While Indoor cultivation can minimize soil loss, they are often surrounded by large cleared areas where soil is exposed and vulnerable to erosion. Additionally, illegal cannabis operations in Canada may introduce further risks to local wildlife through the use of harmful fertilizers

Potential Solutions

Numerous actions can be implemented to mitigate the environmental impact of cannabis cultivation in Canada.

  1. Strengthening regulations to reduce illegal cultivation is crucial. This can significantly reduce the usage of illegal and environmentally harmful fertilizers.
  2. Adopting sustainable agricultural technologies can promote responsible growth. For example, using industrial cannabis to produce bioethanol and biodiesel provides significant potential to lower GHG emissions and boost the Canadian economy[26]
  3. Investment in processing facilities and research into improving cultivation methods. For example, developing more efficient ways of processing; and finding more suitable locations for cultivating cannabis.

Conclusion

In conclusion, Canada's cannabis industry has undergone a significant transformation over the past century, evolving from strict prohibition to full legalization. Cannabis was first criminalized in Canada in 1923, and in 2018, Canada became the first country to legalize recreational cannabis, setting a global precedent. Since then, the cannabis industry has contributed significantly to Canada's economy, generating billions in GDP, creating hundreds of thousands of jobs, and generating substantial tax revenue.

However, while the economic benefits are clear, the industry has also raised concerns regarding public and labour. The increased availability of cannabis has led to concerns about substance misuse and impaired driving. Moreover, the industry faces labour issues, including precarious employment, low wages, and poor working conditions, particularly in cultivation and retail roles.

What is worse, the cannabis industry in Canada presents significant environmental challenges in water usage, air pollution, soil erosion, and land degradation. Cannabis cultivation requires large amounts of water, which can over-use local water resources and negatively impact aquatic ecosystems. The excessive use of fertilizers and pesticides, especially in illegal operations, can lead to water and land pollution, and harm nearby ecosystems. Regarding air quality, outdoor cultivation emits volatile organic compounds (VOCs), contributing to ozone and particulate matter formation, which can accelerate climate change and worsen air pollution. While reducing land-use impacts, indoor cultivation still produces high greenhouse gas emissions due to their considerable energy consumption. Additionally, land clearing for cultivation, especially on steep slopes, increases the risk of soil erosion and landslides.

To address the public and labour challenges, regulatory frameworks must be strengthened especially about equality. Stricter impaired driving laws and better labour protections could mitigate some of the negative impacts. On the other hand, to mitigate the environmental issues, stronger regulations on illegal cultivation and the adoption of sustainable farming practices can be implemented. Additionally, investing in research to improve cultivation methods can help reduce environmental harm while supporting economic growth.

References

  1. ↑ 1.0 1.1 1.2 Dagga Seeds, & Dagganew. (2023). History of cannabis in Canada: From prohibition to Legalization. Dagga Seeds. https://daggaseeds.com/history-of-cannabis-in-canada/
  2. ↑ Carstairs, C. (2022). 1 From Prohibition to Legalization: Cannabis Use and the Law. In A. Hathaway & C. McCann (Ed.), The High North: Cannabis in Canada (pp. 29-51). University of British Columbia Press. https://doi.org/10.59962/9780774866729-003
  3. ↑ 3.0 3.1 Fischer, B., Russell, C., & Boyd, N. (2020). A century of cannabis control in canada: A brief overview of history, context and policy frameworks from prohibition to legalization. In T. Decorte, S. Lenton & C. Wilkins (Eds.), Legalizing cannabis (1st ed., pp. 89-115). Routledge. https://doi.org/10.4324/9780429427794-6
  4. ↑ Government of Canada. (2023) Research to Insights: Cannabis in Canada. Statistics Canada. https://www150.statcan.gc.ca/n1/pub/11-631-x/11-631-x2023006-eng.htm
  5. ↑ 5.0 5.1 Deloitte Canada. (2021). An industry makes its mark: The economic and social impact of Canada’s cannabis sector. https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/consumer-business/ca_cannabis_annual_report-en-aoda.pdf
  6. ↑ The Canadian Press. (2022). Cannabis has added $43.5B to Canada’s economy since legalization: report. Global News. https://globalnews.ca/news/8585983/cannabis-canada-economy-legalization-report/
  7. ↑ Jordan, H. (2024). How cannabis is taxed in Canada - and the future of Cannabis Taxation. Cova Dispensary Software. https://www.covasoftware.com/blog/how-cannabis-is-taxed-in-canada
  8. ↑ Department of Finance Canada. (2017). At a glance: Cannabis taxation. Government of Canada. https://www.canada.ca/en/department-finance/news/2017/11/at_a_glance_cannabistaxation.html
  9. ↑ Canadian Centre on Substance Use and Addiction. (2022). Cannabis legalization: 2021–2022 observations. https://www.ccsa.ca/sites/default/files/2022-06/CCSA-Cannabis-Legalization-2021-2022-Observations-Policy-Brief-2022-en.pdf
  10. ↑ Government of British Columbia. (2024). Learn about B.C.'s cannabis sector. https://www2.gov.bc.ca/gov/content/employment-business/economic-development/support-business-community/sector/cannabis
  11. ↑ Health Canada (2022). Canadian Cannabis Survey 2022: Summary. https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/research-data/canadian-cannabis-survey-2022-summary.html
  12. ↑ Fischer, B., Russell, C., Rehm, J., & Leece, P. (2019). Assessing the public health impact of cannabis legalization in canada: Core outcome indicators towards an 'index' for monitoring and evaluation. Journal of Public Health, 41(2), 412-421. https://doi.org/10.1093/pubmed/fdy090
  13. ↑ 13.0 13.1 Robbins, K. (2019). Impact of Cannabis on the Economic and Social Aspects of Canadian Society. https://carleton.ca/economics/wp-content/uploads/he-robbins-kyle-1.pdf
  14. ↑ Saddichha, S., Werker, G. R., Schuetz, C., & Krausz, M. R. (2014). Stimulants and Cannabis Use Among a Marginalized Population in British Columbia, Canada. International Journal of Offender Therapy and Comparative Criminology, 59(13), 1487–1498. https://doi.org/10.1177/0306624x14541661
  15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 Zheng, Z., Fiddes, K., & Yang, L. (2021). A narrative review on environmental impacts of cannabis cultivation. Journal of Cannabis Research, 3(1). https://doi.org/10.1186/s42238-021-00090-0
  16. ↑ Irma, E. (2022). The Strains of Inequality: An Exploration of the Effects of Cannabis Legalization on Black and Indigenous Peoples in Canada. Carleton University Institutional Repository. https://repository.library.carleton.ca/concern/etds/kw52j904w
  17. ↑ Owusu-Bempah, A. (2021). Where Is the Fairness in Canadian Cannabis Legalization? Lessons to be Learned from the American Experience. Journal of Canadian Studies, 55(2), 395–418. https://doi.org/10.3138/jcs-2020-0042
  18. ↑ Alexander, M., & Ebooks Corporation. (2010). The new jim crow: Mass incarceration in the age of colorblindness. New Press.
  19. ↑ 19.0 19.1 19.2 Wartenberg, A. C., Holden, P. A., Bodwitch, H., Parker-Shames, P., Novotny, T., Harmon, T. C., Hart, S. C., Beutel, M., Gilmore, M., Hoh, E., & Butsic, V. (2021). Cannabis and the environment: What science tells us and what we still need to know. Environmental Science & Technology Letters, 8(2), 98-107. https://doi.org/10.1021/acs.estlett.0c00844
  20. ↑ 20.0 20.1 Butsic, V., & Brenner, J. C. (2016). Cannabis (cannabis sativa or C. indica) agriculture and the environment: A systematic, spatially-explicit survey and potential impacts. Environmental Research Letters, 11(4), 44023-44032. https://doi.org/10.1088/1748-9326/11/4/044023
  21. ↑ Butsic, V., Carah, J. K., Baumann, M., Stephens, C., & Brenner, J. C. (2018). The emergence of cannabis agriculture frontiers as environmental threats. Environmental Research Letters, 13(12), 124017. https://doi.org/10.1088/1748-9326/aaeade
  22. ↑ Desaulniers Brousseau, V., Goldstein, B. P., Lachapelle, M., Tazi, I., & Lefsrud, M. (2024). Greener green: The environmental impacts of the Canadian cannabis industry. Resources, Conservation and Recycling, 208, 107737. https://doi.org/10.1016/j.resconrec.2024.107737
  23. ↑ R.R. Ismagilov, & I.A. Rusakov. (2024). Hemp (cannabis sativa l.) Is an effective carbon-depositing crop. BIO Web of Conferences, 108, 10001–10001. https://doi.org/10.1051/bioconf/202410810001
  24. ↑ Mills, E. (2012). The carbon footprint of indoor cannabis production. Energy Policy, 46(1), 58-67. https://doi.org/10.1016/j.enpol.2012.03.023
  25. ↑ Cheng, K.-C., Ott, W., Wallace, L., Zhu, Y., & Hildemann, L. (2022). PM2.5 exposure close to marijuana smoking and vaping: A case study in residential indoor and outdoor settings. Science of the Total Environment, 802, 149897. https://doi.org/10.1016/j.scitotenv.2021.149897
  26. ↑ Parvez, A. M., Lewis, J. D., & Afzal, M. T. (2021). Potential of industrial hemp (Cannabis sativa L.) for bioenergy production in Canada: Status, challenges and outlook. Renewable and Sustainable Energy Reviews, 141, 110784.  https://doi.org/10.1016/j.rser.2021.110784
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