BUFFALO, N.Y. (WKBW) — The legalization of recreational marijuana in Canada in 2018 brought a lot of excitement, but not necessarily results.
"It's not what people thought it would be, at least not yet," Kyle Murray, Vice Dean at the University of Alberta School of Business, said.
According to Professor Murray, the legalization sparked a rush to capitalize on potential earnings, but the market just never caught up. The New York Times reports many large cannabis producers actually lost hundreds of millions of dollars in 2020.
"The demand side has a lot to do with it," Murray said, "Over time it will stabilize, but over the short term there was probably too much hype initially."
Lawmakers in Albany are hoping for a much different outcome in New York State, estimating legalization of marijuana will instantly create a much needed source of new tax revenue every year totaling $350 million.
Professor Murray says the slow progress of the cannabis industry in Canada doesn't mean those profits aren't attainable. According to Statistics Canada, cannabis sales in Canada rose 120% from 2019 to 2020. Murray says the hesitance of the market was predictable, as it has begun to settle.
"Stigma goes down, new customers get introduced to it and the market will come up a bit," Murray said.