Canadians Paying Less for Cannabis Than Americans

Canadian cannabis prices less than America mg Retailer

America’s neighbors to the north may be accustomed to paying more for consumer goods, but when it comes to cannabis, they are saving big.

According to an analysis by Wikileaf, a cannabis industry analyst, American consumers pay an average of $40 (USD) per eighth of an ounce for legal cannabis while the average Canadian consumer pays $27.90 USD for the same amount. Overall, Canadians are paying approximately 30% less for cannabis than Americans.

Wikileaf also determined which cities are facing the steepest cannabis prices in the United States. The average eighth costs San Francisco residents $43.8. In Denver, the average price of $32.5 is considerably closer to the Canadian average. Toronto customers face the highest prices in Canada at $29.6 per eighth. But the average price drops quickly in Canada as Vancouver, the city with the second highest prices in Canada, has an average price of $27.1 per eighth.

“Part of the reason cannabis is so much cheaper in Canada than the United States is there is a much longer history of legalization in Canada, and thus a larger supply of legal marijuana growers and sellers,” Wikileaf blogger Christian Parroco writes. “While cannabis companies in the United States can’t even have bank accounts, in Canada, there are publicly traded cannabis companies on the stock market. In anticipation of nationwide legalization this year, supply of marijuana continues to grow.”

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As Parroco indicates, lack of banking has been a significant problem for cannabis dispensary operators in the United States. Another issue that may drive up costs is tax rates. Dispensaries in the U.S. cannot deduct any of the typical expenses that most small businesses claim. This increases the overhead for shops and may be passed onto the consumer in the form of higher prices. Zoning laws are also problematic for dispensary operators. Even in legal jurisdictions, strict zoning laws make usable retail space hard to come by and often very pricey for shop owners.

Supply can also impact pricing. Most states in the U.S. with legal cannabis have only recently legalized, meaning there is still a shortage of licensed growers in many areas.

“Cannabis is cheaper in Canada because there has been a long history of a legal supply of weed,” Parroco explains.

Medicinal cannabis was approved in Canada in 2001. Recreational sales have been approved and are expected to begin later this summer.

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