Canadians’ cannabis spending increases 1.2% in Q2

For investors interested in cannabis, StatsCan figures provide insight on consumption and retail prices, which are increasing and decreasing, respectively.

Read: Finding value amid the cannabis confusion

Canadian household expenditures on cannabis for both medical and non-medical use increased 1.2% in the second quarter, reports StatsCan. This follows an increase of 1.4% in the first quarter.

The increase in expenditures has been steady since the first quarter of 2015, rising at an average rate of 1.0% per quarter, says StatsCan. Consumption has risen 72% since the first quarter of 2001, when the Canadian government first passed legislation legalizing cannabis for medical purposes.

In a weekly financial digest, BMO chief economist Douglas Porter puts the figures in context, saying that total consumer spending on all items has risen at about a 1% quarterly pace through the economic recovery, and overall spending is up more than 100% since 2001.

“So, it appears that Canadians have not shifted their cannabis consumption preferences in recent years,” he says in the report.

Read: Pot users who buy legally will generate $4.34B in sales next year: Deloitte survey

Cannabis spending details

In nominal terms, on an annualized basis, Canadians spent $5.7 billion on cannabis products in the second quarter. Of that amount, 84.8% or $4.8 billion was purchased illegally for non-medical use, says StatsCan. “This proportion has fallen from 98.0% in the second quarter of 2014, reflecting increases in cannabis consumption for medical use,” it says.

Expenditures on cannabis for medical purposes reached $784 million, accounting for 13.8% of total expenditures—up from 12.7% in the first quarter. Cannabis consumption for medical use has more than tripled since the second quarter of 2016, says StatsCan.

Also of note is that prices for both medical and non-medical cannabis have fallen significantly over the past few years, declining by 10.6% since the first quarter of 2016. The average combined medical and non-medical reported price for cannabis was $6.74/gram in the second quarter.

Read the full reports from StatsCan and BMO.

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