Pot con­sumers split be­tween black mar­ket and re­tail

Stat­Can ques­tion­naire finds buy­ers pay more for le­gal weed, but get bulk deals

StarMetro Calgary - - CALGARY - HAMDI ISSAWI More sup­ply and de­mand at thes­tar.com/cannabis

ED­MON­TON—Walk­ing out of Numo Cannabis, a re­tail pot shop in north Ed­mon­ton, Bran­don Hyde-Cormier just bought 3.5 grams for about $50. And while he’s happy to be hold­ing, he can’t help but feel a lit­tle burned by the price.

“It’s crazy,” he said. “I’m not look­ing to throw money away.”

Hav­ing just ar­rived in the city from Saint John, N.B., where he said cannabis con­sumers can cop five grams for $40 on the street, he knows there are other routes to pick up. But be­sides be­ing il­le­gal, black-mar­ket buys also come with their own haz­ards and lim­i­ta­tions — ques­tion­able qual­ity con­trol and va­ri­ety, to name just a cou­ple.

“It might be sketchy,” Hyde-Cormier said. “I prob­a­bly would have still bought it in stores.”

On Wed­nes­day, Statis­tics Canada re­leased the re­sults of a crowd­sourced ques­tion­naire aimed at get­ting a snap­shot of cannabis con­sumer be­hav­iour from Oct. 17, 2018, the day the drug was le­gal­ized in Canada, to the end of that year. Among its asks was the ques­tion of how much con­sumers were pay­ing for weed.

Based on 385 re­spon­dents, the av­er­age price of pot post-le­gal­iza­tion was $8.02 per gram, which is up 17.4 per cent from the pre-le­gal­iza­tion price in 2018, pegged at $6.83.

How­ever, the re­port spec­i­fied, the cost cal­cu­la­tion was for the “av­er­age un­weighted price per gram,” mean­ing it did not ad­just for spe­cial prices of­fered for bulk buys, Statis­tics Canada econ­o­mist Con­rad Bar­ber-Dueck said.

“Even when it was il­le­gal, we still found that there was what I would call a Costco ef­fect in the prices,” Bar­ber-Dueck said. “So if some­one buys 28 grams (il­le­gally), they would prob­a­bly pay less as op­posed to just one (gram) where you would prob­a­bly pay more. In fact, that’s the find­ing we did get from this data.”

A deeper dive into the re­sults found the av­er­age price paid for dried cannabis from le­gal sup­pli­ers was $9.70, but it was $6.51 from il­le­gal sell­ers. Of those who an­swered the ques­tion­naire, 183 said they pur­chased cannabis from le­gal sources after le­gal­iza­tion, which in­cluded by mail and in-store buys from gov­ern­ment-li­censed re­tail­ers, and mail orders from fed­er­ally li­censed pro­duc­ers.

But 201 re­spon­dents said they pur­chased their prod­uct il­le­gally, with 85 cit­ing the high price of le­gal cannabis as the rea­son, while 72 said it was be­cause they had trou­ble ac­cess­ing the prod­uct legally, and 44 who said they pre­ferred the qual­ity and va­ri­ety on the black mar­ket.

Over the ap­prox­i­mately 10 weeks fol­low­ing le­gal­iza­tion, the av­er­age quan­tity pur­chased from il­le­gal sup­pli­ers was 17.2 grams, more than dou­ble the amount buy­ers took home from le­gal sell­ers, which was 8.3 grams.

Numo Cannabis em­ployee Ryan Dela Pena said that be­cause the prod­uct is prepack­aged, the re­tailer can’t of­fer dis­counts for bulk buys, adding the price per gram for weed in the store ranges from about $11 to $14.

While he’s heard some cus­tomers com­plain about the price, he said he’s heard more will­ing to pay higher prices for their own peace of mind.

“They’re more like, ‘I’d rather pay the ex­tra two bucks and know where it’s com­ing from or know what I’m get­ting.’”

THE CANA­DIAN PRESS

Cus­tomers shop at Numo Cannabis in Ed­mon­ton on le­gal­iza­tion day. A con­sumer sur­vey by Statis­tics Canada looks at the price gap be­tween le­gal and black-mar­ket buys and finds le­gal­ized pot more ex­pen­sive.

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