OTTAWA - Statistics Canada says Canadian spending on cannabis increased 1.2 per cent to $5.7 billion on an annualized basis in the second quarter.

Nearly 85 per cent of purchases were illegal, down from 98 per cent in mid-2014 as consumption for medical use has increased.

About 4.9 million Canadians between 15 and 64 years old spent the equivalent of about $1,200 per cannabis consumer.

The growth follows a 1.4 per cent increase in spending in the first quarter, rising at an average rate of one per cent quarterly since the beginning of 2015.

The average combined medical and non-medical price for cannabis was $6.74 per gram in the second quarter, with cannabis for medical use fetching a slightly higher price.

Prices of both substances have fallen by 10.6 per cent since the first quarter of 2016.

The agency says household spending on marijuana has increased 72 per cent since the first quarter of 2001, when the federal government passed legislation legalizing the use of cannabis for medical purposes.

Cannabis consumption for medical use has more than tripled since the second quarter of 2016.

Spending on illegal cannabis is expected to decrease substantially once use of the drug is legalized on Oct. 17.

Statistics Canada says $784 million was spent on medical marijuana in the quarter, including $52 million of personal production.

Cannabis spending has surpassed the $5.3 billion spent on spirits last year.

Canadians spent $22.5 billion on alcohol overall, including $9.1 billion on beer, $7.2 billion on wine and $900 million on cider. They also consumed $16 billion of tobacco.