Connoisseurs of B.C. bud have seen a slim increase in average pot prices since the government legalized cannabis last fall, according to Statistics Canada.
New numbers released Wednesday from a running national survey of both legal and illegal cannabis buyers found that countrywide, consumers reported an average price hike of about 17 per cent since pot became legal.
But B.C. users reported paying an average of just 3.7 per cent more for their cannabis.
Cannabis expert and CEO at Materia Ventures Deepak Anand chalked that low margin up to legal sellers being forced to compete with a well-established grey market.
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“The illicit market has been entrenched for quite a while now in B.C. Most companies, producers, the government know that in order to compete with them, pricing needs to be in line with that,” he said.
“They want to make sure that they’re able to get a sizable piece of the pie and not be irrelevant so from a retailer’s perspective, they want to capture as much of the market share as they can so they want to make sure they’re competitively priced.”
Anand said on the government side, B.C. Cannabis Stores has hired extensively from the existing industry and studied it closely to ensure its business could compete.
Tamara Duggan, co-owner of Tamarack Cannabis boutique in Kimberly, said B.C.’s long history with cannabis was likely behind the low markup.
“B.C. has been very accepting of cannabis use in all walks of life, and because of that the market has pretty much regulated itself prior to legalization,” she said.
“I was pretty surprised at some of the prices in other promises. And I’m thinking that as consumers there they must be feeling a little bit happy that over in B.C. that same exact product is that much less.”
According to the StatCan data, British Columbians buying legal and grey-market cannabis reported paying an average of $6.89 per gram before legalization versus an average of $7.15 after legalization.
The data does not break down average B.C. prices by legal versus illegal product, but nationally, it found legal buyers were paying about $9.99 per gram, while illegal buyers were paying about $6.37.
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But in B.C., prices closer to the illicit figure are easy to find on the B.C. Cannabis Stores website, with a sizable selection of product priced at $6.99 to $7.99 per gram. High-end weed goes for as much as $86.79 per gram.
Dan Sutton, CEO of licensed cannabis producer Tantalus Labs, acknowledged that the B.C. government was prepared to drive a hard bargain.
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“It’s probably true that B.C. Liquor Distribution Branch has sought out price competition as a core priority,” he said. “They definitely were assertive in their positions around price competition when they were negotiating with us,” said Sutton.
But he said the reality is that as illicit sellers are slowly squeezed out of the market, consumers will likely need to get used to higher prices.
“That premium is entirely reasonable in the context of federally regulated quality assurance, lack of pesticides, a proven lack of mildew and other contaminants,” he said.
“We have a whole host of regulatory costs that exist for a reason and which we’re happy to pay, but some of those inevitably get passed on to the consumer. My product will never be produced as cheaply as someone who’s growing it in their basement.”
According to StatCan, New Brunswick residents reported the highest change in price post-legalization, a jump of 30.5 per cent from an average of $6.34 per gram to $8.27 per gram.
The Northwest Territories reported the highest post-legalization price per gram at an average of $14.45.
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