Canada’s cannabis production rivals alcohol: StatsCan

Almost five million Canadians spent roughly $5.7 billion on cannabis in 2017, Statistics Canada says, and the industry is worth more than $3 billion.

Statistics Canada released numbers Thursday about the size of the country’s cannabis market as governments prepare for recreational use to become legal this summer.

The $5.7 billion spent on cannabis (more than 90% of which was for non-medical purposes) compares to 2016 alcohol purchases of $22.3 billion and tobacco purchases of $16.0 billion, the agency said.

Canada’s cannabis producing industry was estimated to be bigger than the country’s brewing and tobacco industries, though. The cannabis industry was estimated to be worth $3.4 billion in 2014 (it was down to $3 billion in 2017 due to falling prices), compared to a $2.9-billion brewery industry and a $1-billion tobacco industry in 2014.

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Much of the tobacco and alcohol consumed in Canada is imported, which contributes to the smaller size of those industries compared with cannabis. Most cannabis consumed in Canada is also produced in Canada.

The consumption of domestically produced cannabis was $5.4 billion in 2017, Statistics Canada said. Canadians purchased $0.3 billion of illegal cannabis from abroad in 2017, while illegal Canadian sales outside of Canada were estimated to be around $1.2 billion.

Most of the cannabis production is for non-medical purposes: $4.6 billion in illegal production for non-medical purposes, StatsCan said, versus under $400 million for medical cannabis.

Household spending on the rise

Household spending on cannabis has been increasing since 1961, the year StatsCan began tracking it, by an average of 6% per year. Canadians have been spending more while the price-per-gram is declining: from $12 in 1989 to just $7.50 last year, according to the report. “The falling price is likely due to an estimated increase in supply compared with cannabis demand,” it said.

The share of older Canadians who consume cannabis has been rising: 45- to 64-year-olds accounted for 4% of spending on cannabis in 1975; they now make up 23%.

From 2000 to 2017, the average shares of purchases by age groups were: 33% for 18- to 24-year-olds; 40% for 25- to 44-year-olds; 18% for 15- to 17-year-olds; and 9% for those aged 45 to 64.

All the estimates are provisional and rely heavily on assumptions, the agency said, and they could be subject to large revisions.

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