Legalization pushed up price of pot by 17%, StatsCan says

The legalization of marijuana in Canada has caused the price of the drug overall to increase by about 17 per cent, but people who are buying it legally are paying about 57 per cent more than black market buyers.

That’s one of the main takeaways of a new report from Statistics Canada on Wednesday, showing what the data agency has learned about changes happening in the market for cannabis before and after the drug became recreationally legal on Oct. 17 of last year.

Getting accurate data on something illegal is always tricky, which is why Statistics Canada has been trying something a bit different. It has been asking Canadians to voluntarily submit information about their marijuana purchasing and use, without fear of repercussions, to build a database of what’s happening in the market.

The so-called StatsCannabis crowdsourced database received 19,443 submissions from people prior to legalization last fall. On average, the numbers suggest that Canadians paid $6.85 per gram, on average, for dried cannabis prior to legalization.

Since then, however, the average price has jumped to $8.04, which is a 17.3 per cent increase. That’s based on 1,129 submissions from Canadians, both legal and black-market buyers, 936 of which were deemed to be reliable enough to pass the data agency’s data-cleaning process.

“These estimates, although passing an initial screening, may still be subject to statistical bias, because the sample is self-selected and the number of responses is limited, particularly in smaller provinces and in the territories,” the data agency said. Some places, including Ontario and Quebec, were over-represented in the returns.

Others, such as Nunavut, produced only a handful of submissions — which is why the data agency stresses that “caution must be exercised when interpreting the data.”

Still, the average $8.04-a-gram price is the post-legalization average across the legal and illegal markets put together.

People who have bought legal marijuana have paid an average of  $9.99 a gram, while those purchasing from illegal sources have paid an average of $6.37 a gram.

That’s a gap of almost 57 per cent.

And not only is legal cannabis more expensive, but it seems like the illegal stuff is getting even cheaper.

The illegal price is down to $6.37 a gram, on average, from $6.79 per gram before legalization, according to StatsCan.

And the most expensive way to buy is in a government-run store, where the average price is $10.73 per gram.

Interestingly, 233 Canadians were willing to admit that they were still buying illegal marijuana precisely because the price of legal pot is too much for their liking. Those price-conscious buyers reported being able to find pot as cheap as  5.71 a gram on average.

A further 148 people reported they were still buying from illegal sources because they didn’t like the quality or selection at their local legal option, and 122 people said they were still buying legal because it’s just too hard to do so legally.

In addition to the price gap between legal and illegal marijuana, it’s also clear from the numbers that prices aren’t going up at the same pace across the country.

New Brunswick had among the lowest prices in the country for pot prior to legalization, but since then the price has spiked to $8.27 per gram. That’s an increase of more than 30 per cent.

Among the provinces, the price of pot seems to be highest in Newfoundland and Labrador, at an average of $9.36 a gram since legalization. That’s up by almost 22 per cent from where it was before.

The price of marijuana in British Columbia, meanwhile, has barely budged since legalization, from $6.89 before to $7.15 after.