Marijuana is becoming an increasingly important part of the Canadian economy. According to data released Friday by the government’s Statistics Canada, the cannabis industry’s economic production totaled contributed just over $8.65 billion Canadian ($6.45 billion) in May. That’s the highest level recorded so far this year, topping the $8.32 billion ($6.20 billion) of March.
The May figure represented growth of 11% year over year and is in contrast to the country’s gross domestic product (GDP) trajectory — over the same stretch of time, GDP contracted by almost 14%.
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In fact, cannabis was one of the rare categories that saw an increase; finance and insurance (up 1.9%), Agriculture, forestry, fishing, and hunting (0.9%), and information and communication technology (0.7%) were some of the very few others.
The combination of marijuana’s growth and the overall GDP contraction means the sector is contributing a higher percentage to the total, although it’s still extremely modest. For May, that figure was 0.5%; in May 2019 it came in just below 0.4%.
It should be noted that Statistics Canada’s numbers include both licensed marijuana sales and those of black market sellers; a still-thriving market given the added costs of being fully legal. Although illicit sales are on the decline they remain considerable — the agency estimated that they amounted to CA$3.92 billion ($2.92 billion), representing a 13% year-over-year decrease.
Despite the encouraging numbers, the stocks of Canadian marijuana companies slumped on Friday, in contrast to the gains enjoyed by the wider equities market. Canopy Growth (NYSE: CGC) slipped by 1.7%, Aurora Cannabis (NYSE: ACB) was down 3.3%, and Cronos Group (NASDAQ: CRON) fell 1.5%.
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Cannabis legalization is sweeping over North America – 11 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
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