Cannabis company Hexo Corp. says it is aiming to undercut prices in the illicit market with its new 28-gram product, that costs as much as one dollar less per gram than at a illegal dispensary.
Hexo says the product will be on sale in Quebec cannabis stores for $125.70 taxes included, or $4.49 per gram.
Statistics Canada’s latest price analysis based on crowdsourced data showed that the average cost of a gram of cannabis was $7.37 during the third quarter, with the price of legal and illegal weed slipping to $10.23 and $5.59 per gram, respectively.
Hexo chief executive Sebastien St-Louis said the product under the brand name Original Stash is aimed at the half of Canadians who are continuing to buy pot from the illicit market one year after legalization.
He said Hexo is able to offer a one ounce, or 28 gram size, product at this price point for various reasons, such as less plastic packaging required for the larger size, its increased production scale and lower hydroelectric costs in Quebec.
Original Stash will be between 12 and 18 per cent THC, the company said. It will be for sale in Quebec starting Thursday.
28 grams is a far larger container than is usual in the Canadian legal market, though grey-market sellers often sell in bulk and offer bulk discounts.
Hexo said it worked with Quebec’s provincial cannabis corporation on the pricing strategy and is in discussions with other provinces and territories.
Quebec’s monopoly cannabis retailer has several dry flower products for under $6 a gram, but this will be its first under $5.
With files from Global News