A recent Statistics Canada report confirms price deflation has hit the marijuana industry in an even more significant way than expected, as a downward slide in prices puts a squeeze on profits for producers in the soon-to-be-legal market.
According to data published last Thursday by Statistics Canada, the annual change in the average cost per gram declined 7.7 percent in 2017 verse the prior year, this is the most significant decline in more than a decade, as the Trudeau administration prepares for legalization as soon as July.
Bloomberg believes the decline in prices is not a force of demand, but more on the oversupplied side.
It’s not a lack of demand that’s driving prices lower. Spending on the drug has climbed by 6 percent a year on average since 1961, the Ottawa-based agency said in its most detailed portrait yet of the industry, as it gears up to include legal marijuana in its estimates of the economy’s gross domestic product.
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It'll work itself out and stabilize over the next year. Cheap, black market weed will always be around, just like moonshine. This isn't to say that the quality is always bad, it's just that it's not on the tax man's radar.
ReplyDeleteWell aint that special!
ReplyDeleteSome like consistent quality and will pay a premium for better ___________ (name a product), regardless of who is selling it.
ReplyDeleteOthers will not pay that price if they can find a similar product at a lower price.
It is easy enough to grow just about anywhere, after all it was just considered a weed, a nuisance plant!
ReplyDelete