The cannabis market is quickly becoming a significant part of the Canadian economy, according to the country’s statistics agency.

Statistics Canada said Friday that annualized Canadian household spending on cannabis totalled $5.9 billion in the fourth quarter, with the black market still accounting for $4.7 billion of that figure and the legal market estimated at $1.2 billion. Cannabis, both legal and illegal, is now included in the national economic accounts as StatCan released fourth-quarter gross domestic product figures.

“With this release, cannabis is fully integrated in the national economic accounts, including estimates of legal and illegal economic activities related to cannabis production, distribution and consumption for non-medical and medical use,” StatCan said in a statement. “Before this release, only economic activities related to legal use for medical purposes were recorded.”

StatCan added that cannabis accounted for 0.5 per cent of total household spending in the fourth quarter, while non-medical cannabis accounted for 11.2 per cent of Canadian household spending on alcohol, tobacco and cannabis.

At market prices, cannabis accounted for $2.2 billion or 0.4 per cent of Canada’s GDP in the fourth quarter. The illicit market was estimated to be worth $1.4 billion, or nearly two-thirds of the total fourth-quarter spend, while the legal market was $770 million.

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According to a report released by the Bank of Nova Scotia last month, total cannabis demand in Canada is forecast to be 900 metric tonnes this year and should climb to 1,100 metric tonnes in 2020.

Of that total demand, the black market should account for about 71 per cent of recreational cannabis sales this year, but will fall to 37 per cent in 2020, the bank said.

StatCan said the average all-in market price paid for legal cannabis flower was $9.70 per gram in the fourth quarter of 2018. That compares to an average price of $6.51 per gram for illegal cannabis, which is 32.9 per cent lower than the price of legal pot.

“These statistics must be interpreted with caution because they are anonymously self-reported and do not constitute a random sample,” StatCan said.

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