Costlier legal marijuana is forcing down the price of the illegal version.
Canada’s move to legalize marijuana has been widely praised, yet the road to stabilizing the industry has been a rocky one for a variety of reasons, a a quarterly report by StatsCan suggests the price gap between legal and illegal marijuana is widening.
The latest? Costlier legal marijuana is forcing down the price of the illegal version of the drug.
Statistics Canada recently reported that the price gap between the two types of cannabis is as wide as $4.72 a gram, on average.
StatsCan asked Canadian pot users to tell them about how often they use the drug, and what they pay for it when they do, and the stats are revealing.
Based on 572 voluntary responses in the second quarter of 2019, StatsCan said the illegal price of marijuana fell from $6.23 per gram on average at the start of the year to $5.93 a gram in the three months up to the end of June.
Legal cannabis, meanwhile, went from $10.21 per gram to $10.65. That means the gap between the two is now as wide as $4.72 a gram.
While StatsCan relies on user submissions for a lot of its information, it supplements that data by monitoring prices from illegal online cannabis retailers. The data agency says it obtained more than 423,000 prices that way during the three-month period and, as such, has calculated that across all types of cannabis, the average price per gram of dried cannabis was $8.44 in the second quarter of 2019, down from $8.61 in the first quarter.
Illegal industry still thriving
And the gap is growing, not getting smaller. Three months ago, StatsCan’s report of the first full quarter of price information showed the gap between legal marijuana and the illegal variety was $3.62 a gram.
Tellingly, more than half — 59% — of respondents to the StatsCan survey said they purchased illegal cannabis during the period.
More than a third of them said they did so because the legal version is too expensive. The rest said they did so because they preferred the quality of the illegal options, or because it was too difficult to buy the legal version where they live.
Canada legalized the recreational use of marijuana last October, but the rollout across the country has been plagued by delays, limited supply, and other logistical issues.