Legal cannabis costs 65% more than black-market weed: Statistics Canada

Price disparity has increased since Canada legalized recreational cannabis use

Dried flower is one of the only forms of cannabis now legal in Canada | Shutterstock

The average cost for a gram of legal cannabis post legalization has cost $10.25 while comparable illicit weed has on average cost $6.18 since October 17, Statistics Canada revealed on July 10.

That $4.07-per-gram gap is a 65% disparity, and is larger than the more than 50% cost differential that existed in the fourth quarter of 2018, after October 17, when cannabis became legal in Canada for recreational purposes.

Back then, a gram of legal weed sold on average for $9.82 in Canada and a black-market gram of pot at the time sold for $6.51, according to the nation’s number cruncher.

The most recent Statistics Canada data showed that in the second quarter of 2019, the average sale price for a gram of legal weed was $10.65 while a gram of illicit weed was $5.93. That is a 79% difference.

So the average price for a legal gram of cannabis has been on the rise while illicit cannabis prices have been declining.

“The data from StatsCan is troubling, because it shows that the legal market is getting less competitive over time,” said David Clement, the North American affairs manager at Consumer Choice Center.

“Luckily there are some simple solutions that could be enacted to help the legal market compete when it comes to price. The federal government could quickly get rid of the minimum tax amount, and simply tax cannabis on its wholesale value. This would immediately allow for discount products to hit the shelves, which will put downward pressure on prices.”

cannabis statscan

In addition to changing the excise tax formula, Clement said the government could change production regulations that are holding back industry efficiency.

“Shifting production regulations to be in line with food-grade rules, as opposed to pharmaceutical-grade restrictions, would go a long way in terms of reducing costs, which are passed on to consumers through lower prices,” he said.

The Statistics Canada data is based on 674 samples of legal product and 843 samples of illegal cannabis since October 17.

Click here to view the Statistics Canada data.

gkorstrom@biv.com

@GlenKorstrom