Canada, which in 2018 became the second country to legalize cannabis recreational cannabis usage, is fighting back against illegal products by pushing out legal products with lower price-points. Many experts believe that black market products continue to remain popular – in Canada as well as in areas of the US where recreational cannabis is legal – because the cost of legal cannabis is significantly higher. This is, in no small part, due to higher pricing necessary to cover costs related to regulation, testing, and government taxes.
As noted in the Newsweek piece linked below, “Legally sourced cannabis was reportedly priced at an average of $7.84 per gram, while illegal sources offered it at around $4.36 per gram on average during the last quarter of 2019, according to Statistics Canada.” In order to better compete with illicit products, three of Canada's biggest cannabis producers (Canopy Growth, Tilray and Aurora) are all introducing lower-priced products. According to Canopy Growth’s business development head, the move “is designed to draw consumers from the illicit market and into legal channels.”
Black market cannabis producers do not submit their products for regulatory testing or quality control. As a result, consumers do not know what these items contain, their potency, or whether dangerous contaminants like heavy metals or pesticides are present. By taking on illegal low-cost cannabis and offering the market a safe alternative, these companies are not only exploring a new market and protecting their financial interests but they are also protecting consumer health and safety.
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