uploads///Price Per Gram

Has the Legalization of Marijuana Been a Success in Canada?

By

Updated

Statistics Canada reports on cannabis

Last week, on March 1, Statistics Canada reported its latest statistics on cannabis in the fourth quarter. Following legalization on October 17, 2018, companies (HMMJ) such as Canopy Growth (WEED), Aurora Cannabis (ACB), HEXO (HEXO), Aphria (APHA), and others saw a surge in their sales.

Statistics Canada reported that cannabis-related expenses accounted for about 0.4% of the country’s GDP in the fourth quarter. One of the key reasons to legalize cannabis was to eliminate the illegal market. However, illegal cannabis accounted for 65% of sales, while the remaining 35% was contributed by the legalized cannabis segment. But keep in mind that this was just the first quarter of legalized cannabis.

Article continues below advertisement

Illegal cannabis is cheaper

Statistics Canada also shed light on the pricing for illegal cannabis in its recent report. The price for legalized marijuana stood at 9.7 Canadian dollars per gram in the fourth quarter, which was much higher than the illegal market’s 6.51 Canadian dollars per gram.

Lower prices in the illegal cannabis market compared to the legalized market may slow down the shift of customers buying from the legalized market. Lower prices may also keep the illegal market alive and threaten players in the legalized market.

Next, we’ll discuss the supply and demand situation for cannabis in Canada in the fourth quarter.

Advertisement

More From Market Realist