Illicit Pot Gets Cheaper as Legal Prices Rise in Canada

(Bloomberg) -- One year after Canada legalized recreational cannabis, the price gap between legal and illegal sources is only getting bigger.

A gram of black-market pot was C$4.57 cheaper on average than a gram of legal pot in the fourth quarter, according to crowd-sourced data gathered by Canada’s national statistics agency. That’s up from a gap of C$4.47 in the third quarter and C$3.25 in the final quarter of 2018, when the country first legalized recreational pot.

The gap was widest in New Brunswick, which had the lowest price per gram of illegal pot at C$4.90 and the highest legal price at C$11.36.

While legal marijuana has become more expensive, rising from C$9.69 per gram in the fourth quarter of 2018 to C$10.30 a year later,illicit weed is getting cheaper. This is making it difficult for legal dispensaries to compete with the black market. According to Statistics Canada, just 38% of the C$1.5 billion worth of cannabis Canadians bought in the third quarter was from legal sources.

Men were more likely to buy from illegal sources, with 62% of their purchases from illicit dealers, while just over half of cannabis purchases made by women were from the legal market.

To contact the reporter on this story: Kristine Owram in New York at kowram@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Steven Fromm

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