Canadian household spending on legal cannabis in the second quarter of the year outpaced the illicit market for the first time, marking a significant milestone for the licensed pot industry.
Statistics Canada said Friday that Canadian household spending on recreational cannabis reached $648 million in the second quarter of 2020, an increase of 74 per cent from the same period last year. Meanwhile, spending on medical cannabis was flat at $155 million in the second quarter, StatsCan said.
Canadian household spending on illicit cannabis fell to a new low of $784 million in the second-quarter, StatsCan added. Taken together, the legal cannabis market now accounts for 50.5 per cent of all pot-related spending in Canada.
„The progress is there and there’s more progress to come,” George Smitherman, chief executive officer at the Cannabis Council of Canada, told BNN Bloomberg in a phone interview.
„This is occurring when there’s a lot of pressure on dried flower pricing. It’s even more impressive because there’s more volume being sold as cannabis is now being sold for very competitive prices.”
The milestone comes at a relatively auspicious time for the Canadian cannabis sector. While many of the country’s licensed producers continue to struggle to become profitable, the country has more than 1,100 retailers selling legal pot.
Current retail sales figures suggest the annual market stands at around $2.4 billion.
StatsCan also released monthly figures Friday for the cannabis industry’s contribution to the country’s economy. The legal cannabis industry contributed $5.44 billion to Canada’s gross domestic product (GDP) in June, while the illicit market compromised of about $3.89 billion.
The GDP figures show Canada’s legal pot industry has grown by 60 per cent in June from a year earlier. Meanwhile, the illicit market’s contribution to Canada’s GDP has fallen by about 12 per cent in that same time.
The illicit market also accounts for a 41-per-cent share of the domestic cannabis industry, as of June.