Far more Canadian cannabis consumers are buying their pot legally then the broader numbers suggest, according to a senior Statistics Canada official. In a wide-ranging conversation with Cannabis Professional on the sidelines of The Economist’s Cannabis Summit in downtown Toronto this week, James Tebrake, director-general of macroeconomic accounts for Statistics Canada, explained how the federal data agency came to start analyzing the economic impact of cannabis, why the most frequent cannabis users remain in the illegal market and what StatsCan hopes to share about the demographics of cannabis consumers in this country in the months ahead. Direct transcriptions of Mr. Tebrake’s most noteworthy points, lightly edited for length and clarity, are reproduced below.
Heavy users are keeping the illegal market alive
We peg the production of cannabis in the country, so if you want to say total supply in the country is about 900 metric tonnes. About half of that production is still illegal and the other half is legal, so there is an even split. In terms of the consumer, around 65 per cent of purchases are still illegal and 35 per cent are legal. However, I would say about 50 per cent of the people consuming are buying legally, but it is the more frequent users who still seem to prefer their illegal sources. Most of the reason seems to do with price.
Sales data broken down by product type (i.e. edible, vape, flower) and more specific consumer demographics (i.e. age, ethnicity, income) are coming by 2020
We have been collecting data for the past year and a half and we are going to continue to do that in the household service. The idea is to combine those quarters together into a composite two-year file. That should give us enough sample sizes to start looking at some of those more detailed demographics in the population. We will be able to say, over a certain period, this is what the demographics of the Canadian cannabis consumer look like.
On the economic side we want to be able to tell [Canadians] everything about the price, what is the structure, how much taxes are being collected, product categories, what types of products are Canadians purchasing? Strains of flower, edibles. How much detail we can get into depends a little bit on the type of data we are able to collect but I think the more detail the better more from a health perspective. [What about demographic breakdowns?] That might take a little bit of time because we need a little bit bigger samples in order for us to accurately measure that, but I think by the end of this year we will have a good enough volume of data to be able to get into much of that. That is the economic side, and one of the big questions we hope to answer is that, when edibles come online, will there be sort of a new cohort of Canadians that are going to be consuming? But I think the real business of statistics for cannabis will be on the social side. I think what Canadians are going to demand is more information on the health implications, addiction rates, hospitalization, impaired driving data; we’ve already started asking those questions on our household survey.
Supply is plentiful, but reliable distribution systems are not
There is a maturing in the distribution. Production-wise it seems to be taking place, but what we have observed in the numbers is a lot of the production is ending up in inventory. We have seen this large accumulation of cannabis inventories in the past couple of quarters and it is either because the retail outlets aren’t there for them to get their products out, leaving people to either buy directly from the producer or buy illegally but some of those producers may also be saving some of that inventory for when edibles come online and they can confirm some of that product to extracts. What the numbers are telling me right now is there is plenty of cannabis out there, it just doesn’t seem to be getting to the end user. I don’t know whether that is because the distribution system is still not in place or because that cannabis is being held in anticipation of future products. That is not something I would predict, though it is something we hope to be on top of over the next year.
Cannabis data will get more accurate with the passage of time
The retail sales are quite a bit lower right now than what household consumption is and that is because the retail sales, there is very little in Ontario. [Why not include online sales?] At that point we didn’t consider [the Ontario Cannabis Store] as a retailer. Brick and mortar and any retailer that was doing stuff online so that might have been captured a bit in the retail sales, so that will skew the results, but as more retailers start to come online you’re going to see a lot more people going to retail and those two [retail sales and household consumption] will line up.
Nobody told StatsCan to start gathering cannabis data
One day I just came into work and it was like somebody whacked me over the head. The government was going to legalize cannabis and initially they were talking about July 1, 2018, well, what if some sharp journalist is going to ask me on July 2 what impact cannabis legalization had on Canada’s economy? I wouldn’t have any idea. And I can’t start measuring cannabis only after legalization because I don’t want to show a break in my data because it would potentially skew our GDP data. We were about a year and a half away from legalization at this point, we decided we are going to need to do something here. It was also a sense of social responsibility that, as an agency, we need to collect as much data as possible.
Not everyone at StatsCan was keen on collecting cannabis data
We are statisticians, so many said it was illegal so we couldn’t measure it so don’t try. There was conversation about whether measuring it was in a way backing legalization, so there was a lot of debate within the organization about whether wanted to be there or not. We want to be seen as apolitical, but we decided we needed to do it so we could give Canadians a sense of what is really going on so they can understand how legalization works. [But] that debate didn’t go on for very long because I think there was just a natural curiosity for us. Then we had to ask ourselves what we actually do?
Jameson Berkow