Canadians are paying nearly 50 per cent more for their legal cannabis when compared to illegal sources, according to an analysis of price quotes by Statistics Canada on Wednesday.

StatCan found that in the first two months since Oct. 17 when recreational cannabis use was legalized, the average price paid for dried cannabis from legal suppliers was $9.70. That was 49 per cent more than the price paid for dried cannabis purchased from illegal suppliers of $6.51.

Prior to legalization in October, the unweighted average price per gram of cannabis was $6.83 last year, based on more than 19,000 submissions by Canadians to StatCan’s “StatsCannabis” crowdsourcing application. The legal and illegal prices that were published Wednesday reflect 385 price quotes that were determined to be “plausible following statistical testing,” according to StatCan.

Cannabis prices have been a closely-watched metric by industry executives, government officials, retailers and consumers following the legalization of cannabis, which occurred primarily to stamp out the illicit market and drive tax revenue back to government coffers. The price of a gram of cannabis in Canada is expected to fall in the coming years, mirroring similar moves in U.S. states where pot is legal, as more supply comes online and licensed producers compete with the black market.

GMP Securities analyst Martin Landry wrote in a report Wednesday that dried flower retail prices usually average about $8 to $10 per gram while cannabis oils and capsules retail for about a $15-per-gram equivalent. He added that cannabis concentrates and edibles should be priced equal to, or higher than, the current prices for oils and capsules and will face less pricing pressure than dried flower products.

“First, extracts are less directly susceptible to the oversupply of dried cannabis, which we expect will hit the market in 2020. Secondly, it could be more difficult for consumers to do comparison shopping with extracts compared to dried flower in light of the many form factors that will likely be present in the market,” Landry said.

Last month, Cannabis Benchmarks launched the first benchmark price to track Canadian wholesale cannabis prices. For the week ending Jan. 4, the company's Canada Cannabis Spot Index was $6.60 per gram, down 0.5 per cent from the prior week and down from $7.47 per gram on Oct. 19, when the benchmark was first calculated.

“The stability in prices adds some reassurance to the developing industry,” Cannabis Benchmarks said in its latest report.

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