11.21.2016
policy

When Canada Goes Legal, Pot Could Be $5 a Gram—in Canadian Dollars!

A nickel bag will actually carry weight.

Legal weed makes money, this is true. Another fun fact that you’re aware of if you enjoy getting lit: Marijuana can be a costly pursuit, but perhaps less so in Canada.

While the retail price of a legal bud in the states hovers around $13-per-gram, if Canada normalizes the herb, that price could drop to around $5-per-gram (in that country), speculators suggest.

In November, Canada’s Office of the Parliamentary Budget Officer published a report that projects legal retail sales to begin in January 2018, with the price-per-gram landing just above that $5 pipe-dream, somewhere between $6.75 and $7.50. 

Image via Office of Parliamentary Budget Officer

That price-point is variable, but the improved and weighty budget-rate-bag would include a 12.1 percent sales tax, according to the report. Of course these projections come with stipulations.

From the government report:

“The average price ranges for legal cannabis do not take into account several difficult-to-predict factors that could affect the price, such as regulatory burden, supply shortages, industry competition, choice of distribution model and industry response to illicit market prices. Similarly, the illicit cannabis average price reflects estimates for 2015-16, not the prices when legalization occurs. These could either increase or (more likely) decrease.”

How can Canadian producers offer high quality, low-spend marijuana and still earn a profit? The key to discounted bud is reportedly beating out the black-market competition.

“You could pick any big number as a minimum price. You don’t actually achieve anything for public health—you achieve the opposite, because the product will be supplied, but by suppliers who have no obligation to test, or not use pesticides or fungicides,” Bruce Linton, CEO of Canopy Growth–the Canadian corporate-weed-firm backing Tweed, Inc., which brought Snoop Dogg’s Leafs brand to the Great White North, told Global News.

Earlier this year, back in Washington state––where the average legal weed consumer spends $645-per-year on product––the weed industry began taking on new players. The price of cannabis reportedly decreased, and is estimated to drop an additional 2 percent year-by-year going forward. Cy Scott, founder of pot-industry intelligence clearing house Headset, previously told KINDLAND that producers hoping to stay in the game should exercise restraint in undercutting retail prices:

“For producers, as the market price continues to push downward, they will definitely need to be thinking long-term about investments. As a producer it's easy for pricing to go down, but not so easy for it to go up—so a race to the bottom with lower prices might not be the best thing for them.”

In Colorado, a surplus of recreational weed drove prices down for wholesalers.

Other factors that determine marijuana’s retail price include strain, availability, demand, popularity, and costs associated with production. Before Canada’s weed community can get lit for less than it costs to eat lunch at a taco truck––and purchase weed at the same pharmacy where it picks up its other medications––the country must first legalize weed on the national level. Looking at you, Trudeau.

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