Canadians’ cannabis spending increases 1.2% in second quarter

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

Canadian household expenditures on cannabis for both medical and non-medical use increased 1.2 per cent in the second quarter of 2018, according to the report. This follows an increase of 1.4 per cent in the first quarter.

The increase in expenditures has been steady since the first quarter of 2015, rising at an average rate of one per cent per quarter. Consumption has risen 72 per cent since the first quarter of 2001, when the Canadian government first passed legislation legalizing cannabis for medical purposes, noted Statistics Canada.

Read: Consider health benefits, workplace policies as legal cannabis approaches

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

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

In nominal terms, on an annualized basis, Canadians spent $5.7 billion on cannabis products in the second quarter. Of that amount, 84.8 per cent or $4.8 billion was purchased illegally for non-medical use, reported Statistics Canada. “This proportion has fallen from 98 per cent in the second quarter of 2014, reflecting increases in cannabis consumption for medical use,” it stated.

Read: A roundup of benefits, HR and legal considerations around legalized marijuana

Expenditures on cannabis for medical purposes reached $784 million, accounting for 13.8 per cent of total expenditures, up from 12.7 per cent in the first quarter. Cannabis consumption for medical use has more than tripled since the second quarter of 2016, noted Statistics Canada.

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 per cent 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 of 2018.

This article originally appeared on the website of Benefits Canada’s companion publication, Advisor. Read the full article here.