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Canada's Black Market

How Canada's Cannabis Decisions are Keeping the Black Market Booming Up North

Canada’s Cannabis Industry Keeps Making Moves That Make The Black Market Rich

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Lemon Knowles on Thursday Feb 28, 2019
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Canada’s Cannabis Industry Keeps Making Moves That Make The Black Market Rich

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It seems that in Canada, while authorities make their way in the dark to figure out how to regulate cannabis correctly, the black market isn’t just alive: it’s thriving.


That’s because the various provincial governments keep giving Canadians a reason to go back to their dealer. It’s just quicker, simpler, and cheaper to buy pot from an illegal dealer than legally, at the moment at least.


The Ontario Cannabis Store Monopolizes E-Commerce


The Alcohol and Gaming Commission of Ontario (AGCO) made an announcement that legal pot shops throughout the province are banned from selling cannabis online to consumers. For the first 25 pot shops in Ontario and the many other shops that have the opportunity to open when Ontario finally lifts the temporary cap on licenses, they won’t be able to give customers the ability to buy cannabis online and pick them up at the store. Same-day delivery services are also prohibited.


The entities benefiting from this move are, of course, the black market and the government. If all the legal pot in the province has to go through the Ontario Cannabis Store online, it simply makes no sense for anyone except the government and the black market – who are probably laughing their way to the bank.


Instead of providing retailers with a reasonable solution, it’s only giving them added headaches. That’s because retailers will be mandated by law to buy cannabis through the Ontario Cannabis Store, which gives the government peace of mind that they are complying with the law while generating tax revenue. Sales done through the Ontario Cannabis Store will also be marked up; also benefiting the government.


These moves are empowering the black market and making them richer. Same day delivery, as well as being able to order online then picking it up at the store, are both options that will significantly improve customer access to the plant. Offering this would crush the black market, but the government has taken it away.


To add salt to the wound, 77 communities in Ontario have opted out of cannabis sales. That means that within 77 city limits, customers will have no choice but to order through the Ontario Cannabis System then wait 5 business days to get their pot, or make the drive to the nearest community that sells it. So the most efficient and convenient way for them to get pot is by putting their dealer on speed dial!


Legal Weed Is Officially More Expensive In Canada Than Illegal Pot


According to Statistics Canada, the average price per gram of legal recreational cannabis was at $9.70 last year. This is almost 50% more than the cost of the same thing in the black market, which was at $6.51 at the time of the price study.


Statistics Canada used the StatsCannabis to get 385 price quotes; the crowdsourcing application facilitated the quotes between October 17 and December 31, 2018. They also said that around half of the respondents reported that they purchased recreational pot legally.


The agency added that the average quantity of recreational weed purchased from the black market was double the amount purchased from the various legal sources available including websites or government-run stores. The respondents told Statistics Canada that they bought an average of 17.2 grams of pot from illegal dealers, while they bought only 8.3 grams from legal channels.


“The data also indicated that males are more likely to purchase cannabis from a legal supplier than females, with 49.8% of males purchasing from legal producers compared with 41.6% of females,” said Statistics Canada. “Males were also found to purchase in larger quantities from both legal and illegal sources, however, for both females and males, the average quantity purchased was much higher for those who purchased from illegal sources than legal sources.”


The ongoing cannabis supply shortage, combined with the many regulatory hurdles that legal cannabis retailers need to jump through at the civic, provincial, and federal level of government all contribute to the high cost of getting high in Canada. Doing business isn’t cheap, and licensed producers already have to deal with the expenses that come with compliance of stock exchanges and securities commissions if they are interested in having their shares listed.








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