How high will the price of legal pot be?

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The federal government has said it time and time again: marijuana legalization is meant to snuff out the black market and keep profits out of the hands of criminals.

To achieve that goal, the government has to grapple with a tough question: how much should legal weed cost?

We now know that the provinces will be responsible for setting the price of legal marijuana. In its November 2016 report, the federal Task Force on Cannabis Legalization and Regulation explained why pricing will be a tricky balancing act.

“Taxes should be high enough to limit the growth of consumption, but low enough to compete effectively with the illicit market,” wrote the task force. “Mechanisms such as a minimum price should be used to prevent predatory pricing, if necessary.”

What black market marijuana costs

It’s hard to establish a definitive price for a black market item, but illicit dispensaries in Toronto regularly sell a single gram of marijuana for $10.

A November 2016 report from the Parliamentary Budget Office, however, offers a more in-depth analysis of black market marijuana prices across Canada. The report used data from PriceOfWeed.com, which collects user reports about marijuana purchases and makes them available in a searchable database.

One gram of dried marijuana bud, with a $2 coin for comparison. The size of a gram varies depending on the density of the bud. (Evan Mitsui/CBC)

After running the data through its own statistical analysis and regional weighting, the PBO reported that one gram of marijuana cost an average of $8.32 between February 2015 and August 2016. After adjusting for the bulk discounts common to black market marijuana transactions, the PBO’s figure rose to $9.36 per gram.

Average prices were lower in British Columbia, New Brunswick, and Quebec, and higher in Alberta, Manitoba, Newfoundland and Labrador, Nova Scotia, Ontario, Saskatchewan, and the territories.

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