[dropcap class=”kp-dropcap”]A[/dropcap]ccording to recent data, cannabis prices are still lower in the Canadian black market than in the legal market.
Yahoo! Finance reports that legal cannabis is 57 percent more expensive than on the black market, despite recent growth in the Canadian cannabis industry. According to data collected by Statistics Canada, black market prices have been lowered alongside legal prices. This data has been collected since May 2018.
Additionally, the amount of cannabis consumers reporting that legal cannabis is too expensive rose significantly in recent months. Those who claim they bought cannabis illegally claim that prices also rose from 55 percent to 59 percent. “The share of respondents who reported purchasing illegally due to ‘legal cannabis being too expensive’ rose from 27 percent in the first quarter of 2019, to 34 percent in the second quarter,” the agency reported, according to the Financial Post. “The higher prices are not out of line, since online retailers would have higher overhead costs than other illegal sources,” the agency added.
Despite the price setback, Canadian officials have managed to push the country forward in the cannabis industry nonetheless. Millions have been spent on cannabis research since legalization began. The funding is being used to look at health problems associated with cannabis consumption, as well as how cannabis can be a useful medicine.
“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,” David Clement, the North American affairs manager for the Consumer Choice Center, told CBC Radio-Canada at the time. “It costs half a billion [over five years] to enforce the rules and regulations in the Cannabis Act, so in order to generate the revenues to cover that, they’ve implemented fees and licenses on licensed producers.”
Canada is clearly way ahead when it comes to legal cannabis, but it still has a way to go before they work out a solid pricing scale.