Pubdate: Fri, 26 Jan 2018
Source: Winnipeg Free Press (CN MB)
Copyright: 2018 Winnipeg Free Press
Author: Solomon Israel
Page: B4


Includes cannabis purchased for medical and recreational

IT'S official, according to Canada's government statistics agency:
Canadians spent a ton of money on weed last year.

To be exact, Statistics Canada estimates 4.9 million Canucks between
the ages of 15 and 64 shelled out $5.7 billion for marijuana in 2017.

For comparison, Statistics Canada offered 2016 household spending data
for two other popular drugs - $22.3 billion on alcohol, and $16
billion on tobacco.

The $5.7-billion figure, released Thursday morning, covers cannabis
purchases for both medical and recreational purposes. More than 90 per
cent of that spending was on cannabis used for non-medical purposes.

Even though Canadians spent much more on booze and smokes than they
did on weed last year, Statistics Canada notes the domestic cannabis
industry (an estimated $3.4 billion in 2014) was larger than the
domestic alcohol and tobacco industries that year ($2.9 billion and $1
billion, respectively).

"A substantial amount of the tobacco and alcohol consumed in Canada is
imported, which contributes to the smaller size of these industries
compared with cannabis," wrote Statistics Canada in its online release.

The vast majority of the cannabis purchased was produced in Canada,
said the federal agency, with about $300 million purchased from
outside the country. Statistics Canada estimates Canadian cannabis
producers illegally sold $1.2 billion worth of product internationally
in 2017.

Statistics Canada also estimated Canadian cannabis prices dating back
to 1961, and said those prices have risen by an average of six per
cent annually between then and 2017. The average national price for
one gram of cannabis in 1961 was around $5, peaking at $12 per gram in

The estimated national average price for non-medical cannabis in 2017
was $7.43, compared with $8.18 for cannabis for medical purposes.

Statistics Canada's methodology

This data isn't perfect. Statistics Canada is clear that its estimates
should be considered "provisional and subject to potentially large
revisions because they rely heavily on a number of assumptions, models
and sparse data sources related to the production of the mostly
illegal cannabis industry."

Statistics Canada researchers have been working on this report since
summer 2017, said James Tebrake, director general of Statistics
Canada's macroeconomic accounts branch.

"The biggest activity was trying to find data in order to put
something out that's credible and can be a good start for talking
about the cannabis industry and cannabis expenditures in Canada," he

Statistics Canada started by going through decades of government
surveys, some of which ask Canadians for details about their drug

"What we've done is, we've taken that whole history of data (and) put
all those data points together," Tebrake said.

"Where we have missing years, we would interpolate or model those
missing years to get a time series of consumption."

After creating those historical estimates of how many Canadians
consume cannabis and how frequently they do so, Statistics Canada
developed estimates of the average amount of cannabis consumed by
Canadians every year.

The next step was to estimate prices, Tebrake said. Modern pricing
data was derived "mostly" from data collected by, an
online cannabis price crowdsourcing tool.

"Prior to that, we relied on a number of research studies that
periodically report prices as part of their research," he said.

"But prior to about the 1990s, there's really not a lot of
information. So what our assumption was is that the price is going to
be reflective of the cost of the inputs to produce the cannabis. So
if, for instance, electricity prices were increasing, then whoever's
producing cannabis would need to raise their price to cover the
increasing price of the inputs."

Collecting data for the future

Even though the agency's estimates of past cannabis prices are
imperfect, it's important to have some kind of historical starting
point for the price of cannabis, said Tebrake.

"One of my jobs is to tell Canadians, every quarter, every month, did
the economy grow or not, and by how much," he explained.

"If I were to just put cannabis in the third quarter of 2018, assuming
it's legalized in July, I would then say, 'Oh, the economy grew (by)
probably one of the higher growth rates we've ever seen because we've
legalized cannabis.' But that's not an accurate reading at all because
people have been consuming cannabis for the last 50 years. It's always
been there. Just because it's above ground doesn't mean that there's
new growth."

Estimating prices all the way back to 1961 is useful for regulators
and policymakers who need data sets that cover long periods of time to
do their work, he said.

As Statistics Canada improves its data collection methods on cannabis
prices, it will be revising its figures for 2017 and previous years,
Tebrake said.

To that end, the agency has unveiled its own crowdsourced data tool to
collect data about Canadian cannabis spending. Users can anonymously
submit data on the prices and quantities of their own cannabis
purchases, and also share information about how much cannabis they use
on a monthly basis.

As a reward of sorts, submitters are presented with a chart showing
how their purchase price compares with average prices by region.

Canadians are already using the tool to share their cannabis-price
data with Statistics Canada, Tebrake said.

"We've already got a few quotes in, and they look very reasonable
compared to what we've come up with, so that's encouraging."
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