Motivators of recreational Cannabis consumption in Canada

Abstract

Using Canada’s National Cannabis Survey, we analyze the behaviour of self-reported consumers and non-consumers of both legal and illicit recreational cannabis, post-legalization. Using a two-part hurdle model, we find that: males are more likely to consume legal cannabis than not consume at all, but are not more likely to consume illicit cannabis than none at all; and that teens are more likely to consume illicit cannabis and less likely to consume legal cannabis. Once consuming, males consume the same amount of illicit cannabis as non-males, but more legal cannabis than non-males. Being retired or being unemployed have no effect on whether consuming small or large amounts of cannabis, whether legal or illicit. People who live in rural settings may consume more illicit cannabis than people who do not live in rural settings, but this makes no difference for legal cannabis. Finally, the own-price elasticity of demand for illicit cannabis is -0.37 and -0.38 for legal cannabis: both inelastic. These findings are important for anyone with an interest in discouraging consumption of either legal recreational cannabis, illicit recreational cannabis, or both. Given the inelasticity of demand, increasing prices will do little to deter consumption. Focus should therefore be put on other non-price policies for discouraging consumption based on the negative effects that cannabis can have, especially heavy use of cannabis consumption and the associated cannabis-use disorder. For those with an interest in maximizing profits from the sale of cannabis, the inelasticity of demand is important. Given that demand is inelastic, increases in price will result in increasing profits and increased tax revenues in the legal market.