Legal marijuana prices have dropped 40% in Nova Scotia since 2019

Falling cannabis prices are taking a bite out of the illicit market in Nova Scotia, according to the province's official cannabis retailer.

"The whole intent of legalization was to make an impact on the illicit market," said Bev Ware, a spokesperson for the Nova Scotia Liquor Corp.

Ware said the average price of a single gram of marijuana in Nova Scotia now stands at $6.50, down by nearly 40 per centsince legalization in 2018.

But it's a stable supply of one-ouncepackages of cannabis, some selling for as low as $110, "that helps compete with the illicit market," Ware said.

Financial figures from the NSLC's second quarter show cannabis sales up roughly 20 per cent,to a total of $26.6 million, while average cannabis prices dropped by 13 per cent.

Buying more, spending less

This means that while Nova Scotia customers were buying more cannabis each trip to the NSLC, they were paying about 12 per cent less.

"The last couple of price reviews, suppliers have been reducing their prices, and they're also offering us more value-priced products to offer to our customers," Ware said.

While raw cannabis flower accounts for roughly 60 per centof NSLC cannabis sales, over half of that is now in one-ounce packages, close to the maximum size permitted under federal law.

Ware said another factor is the opening of 18 new NSLC cannabis stores in the past year, allowing more Nova Scotians to conveniently purchase from official sources.

Ware saidwhile customers are faithful to their favourite alcoholic drinks, cannabis sales are driven by price and strength.

"There isn't brand loyalty with cannabis ... So what customers are looking at is price and THChigh THC content and a reasonable price," she said.

The only exception to that trend is with Nova Scotia-grown cannabis, which she saidsells for "more of a premium price," and accounts for about 21 per centof the provincial market.

"Nova Scotians will pay a little bit extra for that quality local Nova Scotia product," she said.

Illegal cannabis prices also falling

David Brown, aformer Health Canada cannabis policy analyst who provides regulatory advice to Canadian cannabis companies, saidfalling prices are a universal trend.

Nova Scotia's prices are"on par, maybe a little below average," said Brown. "Probably a little lower than Ontario, which is the dominant market, and a little higher than what I'm seeing in Quebec, which I think has some of the lowest prices in Canada."

He agreesthe legal market is making gains against unregulated growers and retailers as prices go down.

"One interesting facet is with legalization; not only is the price of legal cannabis declining, but the price of illegal cannabis is declining, too," said Brown, who also writes about the cannabis industry for StratCann, a website devoted to cannabis-related news.

"I'm certainly hearing on my end that a lot of black market growers ... are struggling right now because prices are lower than they have been in a very long time."

The most recent annual Canadian cannabis survey by Statistics Canada found a dramatic consumer move away from the illicitmarket towardlegal channels. Between 2019 and 2020, there was a 71 per centincrease in purchases from legal stores. During the same period, there was a 47 per centdrop in purchases from illicit cannabis dealers.

Brown said he thinks the legal market for cannabis is doing a good job competing, but it could take "many years to shift consumers over" from the illegal market.

However, he said safety testing of cannabis in the regulated market is important to its current customer base.

Ware agrees.

"It meets very stringent Health Canada requirements, so obviously there is a price associated with that. But customers also know what they're getting and they know where it comes from and they know it's safe," she said.

But Ware also said economics are likely a factor, with customers supporting cannabis companies that arecontributing to the economy.

"Those customers who are purchasing the products through us know that they are contributing to the economy, as well," she said.

MORE TOP STORIES