The illicit cannabis market in Canada and US: findings from the International Cannabis Policy Study

Background: In October 2018, Canada became only the second country in the world after Uruguay to legalize non-medical cannabis. The legal framework for cannabis in Canada includes similarities with US states that have also legalized cannabis, while setting international precedents in other policy areas. The Cannabis Act in Canada has several objectives, including replacing the illicit market with a regulated market. Understanding illicit cannabis prices and sources before legalization in Canada is key to evaluating changes in the illicit market post-legalization.

Methods: The presentation will present data from the International Cannabis Policy Study (ICPS) survey, a prospective online cohort of 27,183 respondents in Canada (10,057), US ‘legal’ recreational cannabis states (7,412), and US ‘illegal’ states (9,714). The first annual wave of the study was conducted in August-September 2018, prior to legalization in Canada, with the first annual follow-up to be conducted in August-September 2019. (More information: www.cannabisproject.ca)

Results: The current presentation will provide a brief summary of the cannabis market in Canada and the US immediately preceding legalization (with the potential of preliminary findings of the first 12-month follow up). The presentation will focus on differences between Canada, US ‘legal’, and US ‘illegal’ states in cannabis purchase sources, and pricing. Specifically, the presentation will focus on the illicit cannabis market and the primary factors that influence the size of the illicit cannabis market after legalization: price and retail availability. First, data will be presented on the sources used to purchase illicit and legal cannabis across the three jurisdictions. Second, data will be presented from prices paid across Canada and the US, including a breakdown by source, type of cannabis, and provinces/states. Finally, data will be presented on the relationship between self-reported prices of cannabis, and objective prices collected from brick-and-mortar and online retailers in Canada.

Conclusions: The session will conclude by discussing implications of cannabis legalization on the Canadian illicit market as well as take-home messages for other jurisdictions considering cannabis legalization.