Canadians are used to the idea that most things are cheaper in the U.S. such as clothes, cars, appliances, cigarettes and alcohol. Shifts in the exchange rate lead to waves of cross-border shipping, usually in one direction.
There are a small number of exceptions, pharmaceutical drugs, for one and cannabis. While prices vary by state, it turns out that marijuana is consistently more expensive in the U.S., in states where it is legal than it is in Canada. Why?
Unlike Canada, U.S. states and the federal government both have their own sets of criminal laws. And when they contradict each other, things get messy.
While several states have legalized cannabis, it’s still federally illegal, which complicates the U.S. cannabis economy in many ways.
Because can’t legally cross state lines, any states that’s legalized has to have its own completely self-contained cannabis economy, which leads to endless inefficiencies.
“If there’s a surplus, you can’t ship it to another state”, says Brock University business professor Michael Armstrong.
“Even the companies that are operating nationally are really collections of state organizations. They have to have production independently in each state, and retailers independently in each state. They can have management co-ordinated across the country, but all the operations have to be state-by-state.”
Armstrong points to an extreme example of the problem, a cannabis store that opened not long ago on Nantucket, an island that’s part of Massachusetts.
Since water and air transport are federally controlled, the store has to grow all its own cannabis and make all the products on site.
The store’s dried flower is the most expensive we could find in America, at US$20 a gram, or C$26.22.
By U.S. standards, Canada’s cannabis is a bargain
The lowest-priced dry flower from five Canadian public-sector sites Global News looked at starts just under $7 in non bulk sizes, with a few a little below that point. Quebec has a handful under $6
Ontario and Quebec order a 28-gram bag of dried flower from Hexo. In Quebec the price per gram works out to $4.49, and Ontario its $5.
Deepak Anand, CEO bof Materia Ventures, a cannabis supply and distribution company, noticed the price difference in Las Vegas recently.
“I visited planet 13, which was a fairly large dispensary,” he says. “The prices that I saw for products were insanely high, on both THC and CBD products, compared to Canada.”