Cannabis prices in Canada are way lower than in the U.S., data shows

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We're not encouraging marijuana tourism here, but....

As Canadians, we constantly pay higher prices than Americans for almost everything from apparel to alcohol to air travel.

But at least it turns out we get a break on one item: marijuana.

According to Wikileaf, a website that tracks cannabis prices at dispensaries in the U.S. and Canada, Americans typically pay US$40 for an eighth of an ounce of marijuana, versus US$27.90 (C$36) for the same amount of weed in Canada.

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At current exchange rates, Canadians are paying about 30 per cent less for cannabis than Americans.

"Part of the reason cannabis is so much cheaper in Canada than the United States is there is a much longer history of legalization in Canada, and thus a larger supply of legal marijuana growers and sellers," the Wikileaf blog notes, referring to the fact that medical marijuana has been legal in Canada since 2001, following a court ruling that in essence ordered the government to allow it.

(Though it's worth noting, too, that not all of Canada's banks are happy to do business with marijuana producers.)

But there may be another factor, beyond Canada's relatively long history with legal weed, for the price differential: the risk involved.

The U.S.'s federal and state laws on marijuana have generally been much harsher than Canada's, creating a much higher "risk premium" in the price of cannabis in the U.S. Simply put, if you're a distributor risking a U.S.-sized prison sentence, you're going to want to be rewarded with more money than someone risking a Canadian sentence.

That risk premium is now declining in both countries. Canada's federal bill to legalize marijuana is expected to become law within months. In the U.S., 29 states and the District of Columbia now allow for medical marijuana, while 10 U.S. states have legalized it for recreational purposes.

Also noteworthy: Statistics Canada has recently started tracking the price of marijuana through crowdsourcing, and their numbers would suggest that the weed prices Canadians pay on the streets are even lower than the dispensary prices cited on Wikileaf.

According to data for the first quarter of the year, a gram of marijuana averaged C$6.78 across Canada, or $23.73 for an eighth of an ounce. That's about a third less than the dispensary prices quoted at Wikileaf.

If this keeps up, Canada may develop a reputation as the world's low-price cannabis clearinghouse.

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