Cheech and Chong's New Brunswick Road Trip
Which Canadian province has the largest cannabis sector by far (as a share of the economy)? We’ll get to that.
I have said we need to get our real GDP growth in NB and the rest of Atlantic Canada back to at least 2-2.5% per year. If you look at real GDP growth between 2019 and 2022, PEI is there (3% per year) and NS and NB are doing better (1.7%, 1.6% respectively). Again, I have to say it is refreshing to see the Maritimes at the top of not only the pop growth table but also the GDP growth table. This data is based on the GDP by NAICS data - the GDP by expenditure data for 2022 is not yet available.
So, what is driving the growth? This is where Cheech and Chong come in. Cannabis production nearly tripled in value between 2019 and 2022. The sector added more to real GDP in the past three years than health care and education combined. That is not a typo.
Note this is production - not consumption. Total cannabis retail sales in 2022 equated to $80.5M. The real GDP contribution from cannabis production was closer to $600 million (and output would be higher).
It’s not just Mary Jane. Other crop production GDP expanded by 66% since before the pandemic. I hope people are paying attention.
Other sectors adding a lot to GDP including residential building construction (quelle surprise!), engineering construction (roads, etc.) and the feds. Good to see universities boosting their GDP contribution and the ICT sector too.
I am heartened by these numbers. We need to see a boost in exports and that, along with solid population growth, should help us get GDP back into a good target range moving forward.
This is a great article. It offers hope for better times to come for the New Brunswick economy. Clearly, at +187%, cannabis production is outperforming other sectors. Can you comment on what percentage of the 4.8% GDP growth (2019 -2022) is attributable to Cannabis?
Thanks for that David. Always interesting and something to consider. To me it shows that we are in a bit of a pickle if we're relying on cannabis production to boost our GDP. If there is a general acceptance that we need to move towards a greener economy, then unfortunately we can't rely on the cannabis world to boost our GDP. It's tempting, that's for sure, when you consider the stress our hospitals, schools, accommodations etc. etc. are under with the increase in population. However, if we truly believe we need to do something to help protect the overall environment, then we should look at scrolling back on indoor cannabis production, if not eliminating it. In the words of my previous high school history teacher 'It doesn't take a genius from Gaul' to figure out that growing, drying, and packaging a plant, all indoors, in our climate, using electricity, is not the most efficient form of production. According to a recent University of Colorado report indoor cannabis production is worse than coal mining: "Researches at Colorado State University found in Colorado that growing the drug indoors produces more than 30 percent more greenhouse gases than the state's coal mining industry." I'm not too sure how many provinces would want to celebrate their rise in GDP as a result of new coal mining. So yes, we can genuflect to the world of cannabis production in northern climates, but we can't then complain about the heat. In the words of that amphibious philosopher, 'it's not easy being green.'