Canada will start tracking how non-medical marijuana is grown, sold and consumed, filling a data gap hampering Statistics Canada’s efforts to spell out “economic and social consequences” ahead of plans to legalize the drug next summer.
The agency said data on non-medical cannabis will be baked into key annual and quarterly macroeconomic indicators, including GDP and household consumption, beginning in November 2019.
“There is strong evidence from health surveys and justice statistics that there is significant illegal production, distribution and consumption occurring in Canada, and this has been the case for the last 50 to 60 years at least, but there are few if any related economic data that have been developed over this period,” Statistics Canada said in a report released on Tuesday.
The agency said it is not yet able to estimate the amount of the illegal output and consumption that should be added to the official estimates of GDP.
James Tebrake, the director general of the agency’s macroeconomic accounts branch, authored the report. He told the Business News Network that the first batch of data on marijuana will be released next month. Those early figures, he cautioned, will be presented as broad ranges not precise figures.
“Most of this information is being built from health surveys. You can imagine that when we ask Canadians to tell us about their consumption of cannabis, there might be a downward bias in those estimates given that it is not legal,” he said. “If it becomes legal, we will be able to make a much more precise estimate.”
A 2016 report by Deloitte found 22 per cent of Canadian adults consumed marijuana on an occasional basis. The firm valued Canada’s recreational marijuana market at as much as $8.7 billion per year.
Tebrake said Statistics Canada is not equipped to pinpoint how many Canadians are currently using marijuana. But he figures an answer could be available as early as mid-2018.
“I think we are going to find out relatively quickly,” he said. “It is substantial.”
Tebrake said the agency plans to issue quarterly surveys to ask Canadians about their marijuana consumption beginning in 2018.
Two new industry classifications, the medical cannabis industry and the non-medical cannabis industry, will attempt to take stock of the marijuana being grown both within the law and illegally. Statistics Canada said it will merge them post-legalization.
The agency said gathering data from the current roster of 73 licensed producers will be a fairly straightforward process, but accurately modelling the illegal market will pose additional challenges.
“The output and distribution of cannabis have always been excluded from Canada’s measure of gross domestic product because it was assumed to be relatively insignificant and there were limited data available to produce accurate measures,” the agency said. “While the problem of limited information still exists, the insignificance argument (both as a social phenomenon and as an economic one) no longer holds.”
The report included algebraic formulas for measuring spending, which found, for example, one million people consuming a gram per day at $8 per gram yields $2.92 billion in total household consumption.
Tebrake said Statistics Canada will also develop models to assess domestic output, imports and exports, home production, tax revenues, production by province, and prices at the wholesale and retail levels for non-medical marijuana.
He expects the new data will prove useful in determining how the various provincially-guided distribution models stack up against one another, but not before some of the initial kinks are worked out.
Manitoba has said it will buck the trend set by Ontario, and followed by New Brunswick, when it comes to the day-to-day business of dispensing pot.
Ontario and New Brunswick have opted of to sell marijuana through retail outlets operated by their respective liquor control boards. Manitoba’s approach puts distribution in private sector hands.
“Definitely it will present some challenges as different provinces roll things out in different ways,” Tebrake said. “We’ll have to develop different relationships and different collection strategies to get at this information.”
