A team of international investigators recently conducted a study examining cannabis prices for regulated and unregulated cannabis products in Canada. Lawmakers in Canada adopted national adult-use legalization in 2018, including the legalization of sales of recreational cannabis products. The study’s findings were published in the journal Drug and Alcohol Review.
“The price of cannabis has important implications for many outcomes discussed in legalisation debates. This paper reports on legal and illegal prices of different cannabis products.” the researchers stated about the focus of their work.
“National surveys were conducted in 2022 and 2023 among Canadians aged 16-65 years as part of the International Cannabis Policy Study.” the researchers stated about their methodology. “Self-reported price, purchase quantity and legal versus illegal source of the ‘last’ cannabis purchased was examined from 2686 respondents who used cannabis in the past 12 months for nine cannabis product types.”
The researchers found that prices for the following regulated products were still greater than similar products from unregulated sources:
- Dried flower (+23.8%, p < 0.001)
- Vapes (+18.7%, p = 0.006)
- Hash (+38.4%, p < 0.001)
The researchers also found that prices for regulated ‘capsules’ were lower (-28.4%, p = 0.008) than similar products from unregulated sources. The following products were deemed to have “no statistically significant difference” in prices, whether they were purchased from regulated and unregulated sources, according to the study:
- ‘Drops’ (-3.3%. p = 0.76)
- Edibles (+3.9%, p = 0.49)
- Cannabis drinks (-8.8%, p = 0.21)
- Concentrates (+13.8%, p = 0.15)
- Tinctures (-17.0%, p = 0.28)
“On average, consumers report that 78% of all their cannabis came from legal sources in the past year.” the researchers stated. “Differences between legal and illegal cannabis prices have narrowed considerably, likely due to declines in the price of cannabis from legal stores since the opening of legal markets in Canada.”
The amount of revenue for the first six years following the launch of legal sales was included in a new report from the Ontario Cannabis Store (OCS) and Deloitte, which was published earlier this week.
“Over six years, the industry contributed $29.6 billion in government tax revenue for Canada and $5.3 billion in tax revenues for Ontarians.” stated the Ontario Cannabis Store on its website, announcing the publishing of the report. “Overall, the cannabis industry contributed $76.5 billion to Canada’s gross domestic product (GDP), and $23.1 billion to Ontario’s GDP, between legalization in 2018 and 2024.”
The report is titled “Six Years of Legalization: The Economic and Social Impact of Canada’s Cannabis Sector“. Another key finding from the report was that Canada’s legal cannabis industry supports “98,200 jobs annually across the country.”
“In Canada, total cannabis sales have increased significantly between 2018 and 2024, growing more than sixfold from an estimated $0.9 billion to $5.8 billion.” the report states.
The report also determined the following about Canada’s legal cannabis industry during its first 6 years following the adoption of national adult-use legalization:
- Total capital expenditures reached $42 billion nationwide
- Cannabis consumption patterns have remained unchanged since legalization
- Canada’s industry is the second largest globally
- 5.6% of producer license holders are Indigenous
Canada’s cannabis industry has largely benefitted from a significant head start over many other countries, particularly the United States’ industry. Cannabis remains a Schedule I substance at the federal level in the United States, which hinders the country’s cannabis industry from exporting cannabis products to other countries.