Canada exported $1.2B of illegal cannabis in 2017: StatCan estimate

OTTAWA — Not only do Canadians have a knack for growing pot, they’re also adept at sneaking it across the border, suggests a new report by Statistics Canada.

Last year, about $1.2 billion worth of cannabis — or 20 per cent of Canada’s total weed production — was illegally sold outside the country, according to a provisional estimate released Thursday by the federal agency.

The figure was tucked into an economic report that is part of the agency’s broader effort to track Canada’s transition to a legalized recreational marijuana market.

With the federal government expected to legalize recreational pot as early as July, Statistics Canada is also building up its capacity to collect and crunch data to monitor the eventual cannabis industry. The documents, some of which will be published quarterly, are designed to help inform governments on their social and economic policy decisions related to legalized weed.

But even within the black market, Canadians have proven to be highly proficient pot growers and exporters, the study suggested.

The agency estimated the illegal Canadian sales of the drug beyond the country’s borders last year amounted to $1.2 billion, which represented 20 per cent of Canada’s total production. By comparison, illegal pot exports were estimated at just two per cent of Canada’s overall production in 1961, the report said.

The agency stressed that all its estimates are provisional and subject to potentially large revisions because they rely heavily on assumptions.

Conrad Barber-Dueck, a Statistics Canada economist who worked on the report, said to come up with the export numbers researchers examined data such as consumption, domestic production, the size of the U.S. market, the Canadian share of the American market and seizure data at the border in both directions.

The export figures were key because they help researchers understand the possible impacts of the industry on Canada’s gross domestic product, he said.

“We need to know what’s going across the border, what’s coming in and that tells us the impact to GDP,” Barber-Dueck said.

The report lays out a number of additional estimates for spending, consumption and production.

The vast majority of cannabis consumed in Canada is grown in the country — to the point that the report found it was comparable to the domestic production of tobacco, beer and wine combined.

It estimated the pot-producing industry was worth about $3.4 billion in 2014, while domestic tobacco production that year was $1 billion and alcohol production was $2.9 billion.

In all, the agency estimated that 4.9 million Canadians between the ages of 15 and 64 years old spent $5.7 billion on cannabis last year. The number was smaller than what households spent in 2016 on tobacco ($16 billion) and on beer, wine and spirits ($22.3 billion).

Of those pot purchases, which amounted to about 770 metric tonnes, 94 per cent of the weed was consumed for non-medical — or illegal — purposes.

Over the decades, Canadians have gradually spent more on pot even though the price-per-gram declined from $12 in 1989 to just $7.50 last year, the report suggests.

“The falling price is likely due to an estimated increase in supply compared with cannabis demand,” the report said.

Between 1961 and 2017, household spending on marijuana expanded by six per cent each year. Today, the average cannabis consumer spends about $100 per month on it, the agency said.

Looking at demographics, the report also noted that the share of consumption among people 45 to 64 years old has been on the rise. In 1975, people in that age group made up four per cent of total household spending and in 2017 the share had grown to 23 per cent.

On Thursday, the agency also launched an experimental, voluntary crowd-sourcing platform designed to gather anonymous consumption data from the public, such as usage habits and prices paid. It has also unveiled an online portal called the Cannabis Stats Hub, which enables the public to explore some of the data.

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