New data from Statistics Canada shows the price of legal marijuana has dropped for the first time since recreational use of the drug was legalized in October last year.
Cannabis consumers in Canada can expect cheaper product from their local legal dispensaries.
New data from Statistics Canada released on Wednesday (October 9) shows the price of legal marijuana has dropped for the first time since recreational use of the drug was legalized in October last year, though illegal cannabis continues to be cheaper.
Legal cannabis prices fell almost 4 percent in the third quarter to C$10.23 per gram from a previous price of C$10.65 per gram.
Until this most recent quarter, the cost of legal cannabis had been rising. Despite the recent decline, legal marijuana is still up 4.9 percent from the initial cost of C$9.75 per gram when it first became legal federally in October 2018.
Average cannabis prices from the combined legal and illegal sources dropped 6.4 percent in the third quarter this year, falling to C$7.37 from C$7.87 per gram.
The federal agency reported that illegal marijuana prices tumbled 5.9 percent from the last quarter to C$5.59. Consumers of illicit cannabis have been getting a discount on the plant since legalization, as well, with prices dropping 12.4 percent since Q4 of 2018.
Statistics Canada has been gathering the information from illegal cannabis websites since May of last year, giving a different view of the illicit market since it does not include prices from illegal storefronts.
Over 570,000 prices have been collected since the second quarter of 2018, the agency said, adding that over 413,000 responses passed the validation process.
Since the data only reflects online purchases of illicit cannabis, it’s not completely comparable with StatsCannabis data that tracks online and other means of purchasing.
Statistics Canada said the web data shows an inverse relationship, where prices drop as the quantity of cannabis purchased increases.
“In the third quarter, web-scraped data showed that cannabis purchases in quantities of less than 1.5 grams averaged C$10.23 per gram, whereas purchases of 28 grams or more averaged C$5.86 per gram,” the agency said.
Mature US state markets pave the way for cannabis price drop
Though there has been a decrease in cost, average cannabis prices in Canada are still significantly higher than in some US jurisdictions.
According to data from cannabis research firm Headset released in March this year, Colorado reigns with the lowest price per gram of dried flower in the US at US$4.60, or C$6.12 based on conversion rates on October 10, 2019.
Washington comes in as the second cheapest with an average price of US$4.90 per gram, or C$6.51.
Headset’s data also shows the most expensive marijuana can be purchased in Nevada at US$13.70 per gram of dried flower or C$18.21.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.