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Canada’s Cannabis Prices Increase After Legalization

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Early crowdsourced data is showing that Canada’s legalization model, with provinces’ government-run market options, has inadvertently affected the legal market for cannabis which subsequently pushed cannabis prices higher than the black market.

Statistics Canada’s StatsCannabis has been collecting data pertaining to cannabis-related crime, health and the cannabis market in the country. Statistics Canada found that the price of cannabis in Canada has risen 17 percent between legalization and the end of 2018.

Using 385 price quotes that the organization deemed “plausible”  and were collected by crowdsourcing, Statistics Canada research found that prior to legalization, the average price per gram of cannabis was $6.83. After recreational cannabis sales became legal last October, that has grown to an average of $8.02, a 17 percent rise.

StatsCannabis also reported that the average quantity purchased from legal suppliers was 8.3 grams, with an average of 4.7 grams when buying from a store and 9.1 grams when purchasing online. On the black market, the average quantity was 17.2 grams.

“The taxes and fees create prices that are high out of the gate, and then a lack of competition prevents those prices from being slowly pushed down,” said David Clement, the North American affairs manager for the Consumer Choice Center.

The money generated from taxes and licensing go to fund the cannabis program, and Clement told CBC News that they will use an estimated half a billion dollars over the next five years. On top of that, some provinces in Canada have access to legal cannabis only through government-run shop fronts or online retail.

After legalization, about a third of cannabis consumers were still buying from their black market dealers, who were pushed out of the cannabis market by the government’s monopoly model in several provinces.

“All of us thought, ‘Okay .?.?. I’m going to be able to come out of the shadows and I’m going to be able to pay taxes,’ ” said David, who spoke to the Washington Post on condition his last name not be used. “As time went on, it became clear that’s not what they were after.”

Consumption also depended on, if the cannabis was on the legal or black market. Legal cannabis consumption averaged 9.5 grams, while illegal cannabis consumers partook in 19.9 grams per month. However, there were no differences between men and women in their choice of cannabis consumption, with amount purchased between both about 13 grams, and an average of 15 grams used per month.

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