Canada Collects Over 5.4 Billion in Taxes from Cannabis Revenue
Federal data shows that while total revenue is high, the central government received less than expected and investments in education remain low
Published on 12/04/2025
The majority of the amount generated from legal sales was allocated to the provinces, which collectively captured 4.2 billion dollars of the total. Image: Canva Pro
According to the latest federal data, Canada has collected over 5.4 billion Canadian dollars in taxes from cannabis revenue since legalization in October 2018. The numbers were disclosed as part of a response in the House of Commons, requested by Conservative MP Luc Berthold.
The report provides one of the most detailed overviews to date of the financial distribution in the sector. While the provinces recorded significant gains, the federal government faces challenges in meeting its initial targets.
Provinces Lead Gains from Cannabis Revenue
The majority of the amount generated from legal sales was allocated to the provinces, which collectively captured 4.2 billion dollars of the total. Ontario received the largest share in the country, totaling 1.5 billion dollars in revenue.
However, Alberta stands out as the biggest proportional winner. Despite having less than a third of Ontario's population, the province collected just over 1 billion dollars. This represents about 210 dollars per person, the highest per capita cannabis revenue return in Canada.
On the other end of the spectrum, Quebec recorded the lowest per capita revenue: 55.31 dollars per resident since 2018. The province's cautious retail expansion model and strict price controls help explain this discrepancy.
Federal Government Falls Short of Cannabis Revenue Projections
While the provinces have benefited, the federal government's share of revenue, at 1.2 billion dollars, fell below Ottawa's expectations. In the 2018-2019 budget, the government projected 690 million dollars in the first five years of legalization.
Instead, by the end of the 2022-2023 fiscal year, Ottawa had collected about 567 million dollars, a much lower amount than expected. This deficit has fueled discussions in the industry about the impact of federal tax rules on cannabis revenue.
Producers have long warned that the special excise tax structure and provincial profit margins are squeezing yields. According to the sector, this tax pressure threatens the viability of legal businesses against the illicit market.
Educational Spending Lags Behind Cannabis Revenue
The published data also highlights another significant disparity. Public spending on education and prevention has not kept pace with the generated cannabis revenue. Ottawa allocated 83 million dollars for educational initiatives in the five years following legalization.
However, Health Canada reports that only 21.6 million dollars have been spent so far, representing just a quarter of the promised amount. More than half of that amount (13 million dollars) was used only in the first year, between 2018 and 2019.
In the periods of 2020-2021 and 2021-2022, the agency allocated less than 500,000 dollars per year to education programs. Although spending rose to 2.3 million dollars in the 2024-2025 fiscal year, the amount is still considered low.
Seven years after legalization, the regulated sector continues to mature, but the financial situation remains complex. The economic impact of cannabis revenue has been significant, but its distribution — and alignment with public health commitments — remains uneven.
With information from NewsWeed
