Top reasons why marijuana is cheaper in Canada than the US

A man smokes marijuana during the annual 4/20 marijuana rally on Parliament Hill in Ottawa, Ontario, Canada, April 20, 2018. (Image via Reuters)

The competition between the U.S and Canada has come to the point where Canada’s marijuana is cheaper than the United States. 

A study by Wikileaf shows how an average price of an eighth of an ounce of weed in the U.S is $40 whereas in Canada it is $27(C$36).

graph - Top reasons why marijuana is cheaper in Canada than the US

Here are the top reasons why it is the case:

1- Legalization

While California was the first state to legalize medical marijuana in 1996, medical cannabis has been legal nationwide in Canada since 2001.

“Part of the reason cannabis is so much cheaper in Canada than the United States is there is a much longer history of legalization in Canada, and thus a larger supply of legal marijuana growers and sellers,” the Wikileaf blog notes.

This has allowed Canada to have a much more active legal suppliers and retailers.

Due to marijuana’s illegality on a federal level, U.S. marijuana companies are unable to use their financial institutions to process their transactions. This is not the case in Canada where there are 59 publicly traded companies.

2- Risk Factor

So far, the U.S market is still marred by a risk factor.

Illegal sales in the U.S is much riskier, pushing dealers to charge more for their products.

Canadians also enjoy more flexibility in exporting their medical cannabis products outside the country.

For the first quarter of the year, Stats Canada said a gram of marijuana averaged C$6.78 across Canada or $23.73 for an eighth of an ounce. According to Wikileaf, that’s about a third less than the dispensary prices in the United States.

If this trend continues, Canada could develop a reputation for having cheap weed.

price - Top reasons why marijuana is cheaper in Canada than the US

3- Legalization

Recreational marijuana is expected to be legal this summer in Canada. This has invited and lured investors and companies to tap into the green rush.

Daniel Tencer from Huffington Post Canada added another noteworthy observation. He said Statistics Canada has recently started tracking the price of marijuana through crowdsourcing, and their numbers would suggest that street marijuana prices in Canada are even lower than the dispensary prices cited on Wikileaf.

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