Illegal Canadian Cannabis Nearly Half as Expensive as Legal Sources

Illegal cannabis products in Canada are, on average, $4.72 cheaper per gram than their legal counterparts, according to Statistics Canada data outlined by the CBC. On average, the price of illegal cannabis is now $5.93 per gram – down from $6.23 at the beginning of the year – while legal products cost $10.65 per gram, up from $10.23 at the start of the year.

Statistics Canada also found that 59 percent of cannabis consumers bought cannabis illegally at some point during the year. More than a third of respondents indicated they chose the illicit market because of the cheaper prices, while the rest of the respondents who purchased cannabis illegally said the quality was better or they did not have easy legal access where they live.

The agency obtained more than 423,000 prices for both legal and illegal products and found that, in both markets, the average price of cannabis was down from $8.61 in the first quarter of the year to $8.44 in the second quarter. In April, Statistics Canada had reported that cannabis prices had spiked in both legal and illegal markets post-legalization from $6.85 per gram to $8.04 – a 17 percent increase.

Last month the agency reported that the federal government had earned $186 million in general and excise taxes related to cannabis sales since legalization last October. Cannabis is taxed at $1 per gram or 10 percent of the pre-tax transaction price; throughout Canada, general taxes on goods and services range from 5 percent in Alberta to 15 percent in the Atlantic provinces.

In October, the sale of “alternative cannabis products” – edibles, concentrates, topicals, and tinctures – will be permitted but regulators don’t expect those products to hit shelves until December. The government has not indicated what the tax rates for those products will be.