The Average Cost of Buying Cannabis in Ontario

The Ontario Cannabis Store (OCS)

The Ontario Cannabis Store, or OCS, is the provincial wholesaler of cannabis in Ontario. Retail stores are run by private companies and must purchase all cannabis through the OCS. Individuals in Ontario can buy cannabis online through the OCS.ca website. The OCS is the primary source of online sales of cannabis in Ontario. Retail stores have gained the ability to do curbside pickups and deliveries during the COVID-19 crisis but might be banned again in the future.

Because all legal cannabis in Ontario must pass through the OCS’s hands, they are the primary source for cannabis sales information. The OCS releases quarterly and annual ‘insights reports’ that provide factual details around cannabis sales in Ontario.

1. 2019-2020

The OCS has released its first annual report for the 2019-2020 period. This report provided the first extensive overview of the progress of legalization in Canada. Ontario has a population of around 14.5 million people, making it the largest province by population. Citizens of Ontario represent approximately 38% of the entire country. This province’s trends help provide a decent estimation of Canada’s overall situation (Ontario Cannabis Store, 2021).

In 2019, Canada completed its first full year of recreational cannabis sales. Between April 1, 2019, and March 31, 2020, 27.8 million grams of cannabis were sold online and in-store in Ontario. That equates to 27,800 Kilograms, nearly 61,300 pounds, and over 30 tons.

In the same timeframe, Ontario increased the number of retail stores from 22 to 53. As we’ll see later, this initial rate would be considered slow compared to the growth we are currently seeing in the province.

As a central pillar of the Canadian legalization strategy, the price of cannabis was considered to be an essential variable. The goal of the Canadian government was to convert grey market consumers to the legal cannabis industry.

The illegal market dried the OCS reported flower average price as $8.23.Compare this to the average price of OCS sales of dried flowers at $8.56. Retail stores in Ontario sold dried flowers at an average price of $10.84.

The OCS reported that consumers are drawn to lower-priced products, but there is interest at all price-points. The critical factor for selling these products appears to be meeting customer expectations around product quality.

The OCS reported the velocity of sales growth across different price points. The $5-8 range grew by nearly 5-times, the $8-12 range grew by 3.5-times, and the $12-15 range grew by 2.5-times. There were smaller increases in higher price ranges.

2. A Year of Growth: 2020

While we await the second annual insights report, we can look to the most recent quarterly report for sales information leading up to the end of 2020. In this latest quarterly review, the OCS provided further updates to the cannabis sales trends in Ontario.

Retail store growth expanded at an increased rate in 2020. By the end of the year, there were over 324 stores opened. These numbers have continued to proliferate in 2021. Considering how few stores were open by the start of 2020, this retail store growth rate has accelerated dramatically.

The growth in sales by price levels demonstrated some exciting trends. Between October 1 and December 31, 2020, the average cost of $3-6.50 grew by 4.6-times. That said, the price ranges of $6.50 through to $20.50 saw similar increases of around 1.4-2-times. As you can see, there is a wide range of price-points for dried flower cannabis products. From budget ounces to premium bud, consumers in Ontario can take their pick.

By the end of 2020, the grey market prices decreased to an average of $7.76. However, in the same timeframe, sales on OCS.ca dropped to an average of $6.24. The legal cannabis industry attained a lower average price per gram average at the start of 2020, representing a substantial achievement. The average price of dried flowers decreased in retail stores as well. By the end of 2020, retail stores reached an average price per gram of $9.13.

The subcategories of cannabis products saw a wide range of average prices-per-gram in the last quarter of 2020. Creams and lotions saw the highest average, reaching $60/gram. Capsules saw an average of around $35/gram, and cannabis oils averaged nearly $2.50/gram.

On the lower end of the spectrum, cannabis beverages cost around $2/gram, and baked goods and chocolates were around $5.50/gram. Hash, kief, and sift had a slightly lower average than dried flowers, around $6.15/gram.

As you can see quite clearly, the price-per-gram of cannabis varies substantially depending on the product subcategory. Keep in mind that these numbers are focused solely on cannabis. Other factors also impact the prices of subcategories of cannabis products. 

2021 and Beyond 

The start of 2020 saw the legal cannabis industry gain a competitive price advantage over the illicit market. By the end of 2020, dried flowers dropped to a price per gram average of  $6.24. Consumers also enjoyed the increased variety in both quality and price of dried flower options.

In 2021 and beyond, we expect to see trends continue to progress. Consumers should continue to see more affordable options while continuing to have access to higher quality bud. Based on this and the fact that legal cannabis is now cheaper than illicit bud, cannabis legalization appears to be a success so far.

Citations

Ontario Cannabis Store (2021). Insights Publications. Retrieved from: https://ocs.ca/pages/insights-publication.