Cannabis price 'race to the bottom' hurts market's future, says CEO

Photo: The Canadian Press

The head of Ontario's cannabis distributor says the "race to the bottom" happening with pot prices risks hurting the market's future.

Ontario Cannabis Store chief executive David Lobo says when consumers get used to paying lower prices, it can take a generation to change their perception and convince people to pay more again.

In an economy where inflation is stubbornly high and raising the costs of most consumer goods, he says the industry can't keep pushing lower.

Lobo says the OCS is doing its part in fighting the race to the bottom with a forthcoming plan to lower its margins, which he estimates could hand $60 million to licensed pot producers next year.

Since recreational cannabis was legalized in 2018, pot producers have been dropping prices to fight the illicit market, where weed is much cheaper and sellers operate outside restrictions imposed on the legal market.

Statistics Canada said a gram of legal cannabis cost $10.29 on average in 2019, whereas the OCS had some dried flower products selling for under $4 this week.