Higher prices for legal cannabis are enough to drive Canadian consumers back into the black market, based on crowdsourced price data released by Statistics Canada. The average price of legal cannabis soared about 17 percent since Oct. 17, 2018, after recreational cannabis was legalized in Canada.
In Canada, the average price per gram of legal cannabis is at C$9.99 ($7.50 USD), while the average price per gram on the street is C$6.37 ($4.78 USD). This makes the price at purchase from legal sources 56.8 percent higher than cannabis purchased from illegal sources. The most expensive category was cannabis purchased from storefront government-licensed sources, with an average price of C$10.73 ($8.05 USD) per gram.
Vice President of Strategy at Lift & Co, Nick Pateras, believes the prices are far too high to expect consumers to continue purchasing legal cannabis. “This is why there are a number of consumers who will have to be convinced to return to the legal category. They came in to buy once, but then were discouraged enough by the prices that they’ve not returned,” Pateras told Yahoo Canada Finance.
Compared to data from the fourth quarter of 2018, the average price of legal cannabis rose from $9.70 per gram to where it is today at $9.99 per gram. Legal cannabis in Canada is tested for contaminants and safety, and consumers get what they pay for.
The increase in price depends highly on the quantity of cannabis that was ordered. “All customers, no matter the frequency of their use, were paying more for dried cannabis after legalization,” StatCan stated in a press release. “Infrequent consumers, or those who use a few times a year, were paying 27.2 percent more per gram of dried cannabis, while more frequent users, or those who consume daily, were paying 14.8 percent more since legalization.”
Similar problems are being felt in the United States. Legal cannabis prices in California, for instance, are driving some consumers back into the black market.