The average price of a gram of cannabis in Canada has shot up 17.3% to $8.04 post-legalization, according to Statistics Canada.
The national statistics agency calculated that the average price per gram of adult-use marijuana was $6.85 pre-legalization, based on Canadians’ submissions to its crowdsourcing app. It then analyzed a further 936 submissions between Oct. 18, 2018, and Mar. 31, 2019, and discovered a sharp increase in the average price.
Statistics Canada also found interesting provincial and territorial discrepancies. New Brunswick had the lowest marijuana price before legalization at $6.34, but it has now increased 30.5% to $8.27. Quebec remains the cheapest territory in which to buy marijuana, with the average price per gram rising from $5.82 to $6.75 post-legalization.
Prince Edward Island saw the smallest price rise, with the average price increasing 5% to $7.69. Manitoba saw its price increase 27.7% to $9.14, the second sharpest rise after New Brunswick. Northwest Territories is the most expensive place to buy cannabis, according to Statistics Canada, followed by Yukon.
People that use cannabis daily pay the lowest amount per gram ($7.55) and this rises $8.26 for those that use it a few times per week. People using marijuana a few times each month spend an average of $9.18 per gram, and those that use it just a few times per year spend $9.72 per gram.
Since legalization, Canadians who have purchased dried cannabis from legal sources have paid an average of $9.99 per gram, while those buying on the black market have paid an average of $6.37 per gram. Statistics Canada estimates that the price of cannabis from illegal sources has gone down since legalization, and the purchase price from legal sources is 56.8% higher.
This presents a headache for the legal industry and for the government. If there is no crackdown and the black market remains vibrant, legal retailers must lower their prices to essentially seize market share from dealers.
Scotiabank estimates that the black market will control 71% of cannabis sales in Canada in 2019. Dealers are not bound by the regulatory restrictions, taxes, and licensing fees that licensed retailers must meet, so they are able to offer better consistency of supply at lower prices.
However, the Scotiabank analysts predict that the percentage of black market cannabis sales will drop to 37% by 2020 as the legal supply chain improves, there is more cannabis to go around and packaging issues are sorted out.