Canadian Marijuana Prices Dropping Ahead of Legalization

Canadian marijuana prices
The event next week will be the first time New Orleans hosts the MjBiz Conference. (File photo)

More licensed producers are entering the cannabis industry causing Canadian marijuana prices to drop.

As supplies rise, Canadian marijuana prices are falling. Profits for licensed producers are expected to be slimmer than previously estimated. Interestingly, it’s not a lack of demand pushing prices lower. According to data published by Statistics Canada, spending on cannabis has climbed 6 percent per year on average since 1961.

Bloomberg Analyst Kenneth Shea says,

“Falling marijuana prices will indeed pose a challenge. In Colorado they have learned to diversify and add more value to the equation.”

Shea says companies can adapt by creating solid brands and offering other services like strain advice or medical recommendations. The average cost per gran fell 7.7 percent in 2017, which was the steepest drop in 10 years.

chart estimated price per gram of dried marijuana - Canadian Marijuana Prices Dropping Ahead of Legalization
A November analysis from Canaccord Genuity estimates average prices for the total legal market (medical and recreational) will stay steady around $8 per gram until 2019 or 2020.

Citizens can offer data on Canadian marijuana prices

The study represents the most detailed information source to date. The drop in prices in 2017 brought the average cost of a gram to $7.43. This is down from $8.43 in 2015 when the Liberal campaign to legalize marijuana began. However, Canadians have an opportunity to refine the Stats Canada “experimental model.”

Citizens can contribute to an anonymous crowdsourcing website for aggregated data. They will request information related to cannabis consumption such as purchase price, quantity, and quality. It can also be specified in the survey if the marijuana was intended for recreational or medicinal use. James Tebrake, a researcher at Stats Can. He says it has been a tough road,

“It’s been very difficult to obtain this information because most of this activity has been illegal, that’s why we are trying a lot of different things to collect as much data as we can.”

Canada used to be an importer of marijuana. Now, they have shifted to becoming a worldwide exporter. Imports shrank in 2017, while Canada’s exports have grown, totaling about C$1.2B last year.

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