Why Is Canada’s Black-Market Cannabis So Much Cheaper Than The Legal Stuff?

Cannabis has been legal all throughout Canada for more than a year now, but the black market is still thriving. This can be attributed to a variety of factors – for example, many argue that black market cannabis is often higher quality that the legal stuff, and there is undoubtedly more variety. However, the main factor is price. The cost of legal weed steadily increased after legalization until it reached prices 80% higher than comparable product on the black market. Prices have tapered off slightly, but the difference is still significant, and more and more Canadians – around 60%, now – are turning to illicit avenues to buy their cannabis. What causes these huge price differences in the first place?

Cannabis Legalisierung

The legal market isn’t growing fast enough.

Canada’s legal cannabis market has only been around for a little more than a year at this point. Meanwhile, the black market has a head start of almost a hundred years. Combine that with all the legal hoops that new licensed growers and dispensaries have to jump through, and it’s not at all surprising that legal cannabis just can’t grow fast enough to become a real competitor. It’s not all on the business vs. business side, either – experienced users are likely to have trusted black market suppliers already, and since the prices are so much cheaper, why not stick with what’s already working?

Supply and demand.

The supply of black-market cannabis is far larger than that legal market’s supply, which means that black market suppliers can sell larger volumes of cannabis at a lower price and still turn a profit. Meanwhile, legal cannabis retailers have experienced supply problems ever since legalization. Due to all the barriers to entry for legal growers, there have been numerous cannabis shortages all across Canada.