One of the Canadian government’s chief aims in legalizing marijuana was to eliminate the black market.
And yet, one month after legalization came into effect on Oct. 17, a new Ipsos poll conducted on behalf of Global News reveals that of those who have purchased cannabis in the last month, 35 per cent went back to their pre-legalization sources. In other words, they skipped legal avenues in favour of their old dealer.
Whether that’s the beginning of a good or bad news trend depends on who you ask. At this early stage it’s “much ado about nothing,” says Jennifer McLeod Macey, vice-president with Ipsos.
“It’s kind of like Y2K where we’re expecting this big change overnight and we haven’t seen it.”
So what can you expect to see moving forward? Legalization hasn’t exactly been a smooth road, from legal retailers turning away would-be buyers on Day 2 after running out of stock to delivery mishaps and critiques over pricing to concerns about Quebec’s plan to raise the legal age for smoking pot to 21, and medical marijuana shortages.
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Legalization is a process not an act, says Allan Rewak, executive director with the Cannabis Council of Canada.
“We are competing against very well established, very robust and very wealthy illicit market places serving Canadians for almost a hundred years.”
Rewak is heartened by the Ipsos figures. Nearly three-quarters of the 2,402 Canadians surveyed said they had tried to purchase or did purchase cannabis after legalization. However, where they got it varied:
- 28 per cent used online, government-run websites
- 28 per cent used government-run stores
- 22 per cent visited licensed privately run stores
- 16 per cent shopped at a licensed privately run website
- 35 per cent just stuck with their old, non-government approved dealers
That it’s only a third of Canadians sticking to the black market is actually lower than Rewak thought it would be one month in — a good news story.
“We thought this process would take more time,” he says.
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But while Rewak expects more Canadians will abandon the black market as regulatory kinks get worked out, Ian Dawkins, co-founder and principal at Althing Consultancy, is not convinced.
“It’s indicative of a much broader set of problems,” he says.
A slim majority of Canadians surveyed by Ipsos, 54 per cent, believe legalized cannabis costs too much money. To Rewak, that’s expected.
“I think you’ll always get a response that says it’s too expensive,” he says, noting people are always inclined to say products they use recreationally, like cannabis and alcohol, are too expensive.
“I don’t think you’ll ever see a poll that says, I think beers are too cheap.”
Here’s how much cannabis costs across Canada
To Dawkins, price concerns are a harbinger of problems to come.
Look at Alberta, he says, where fights over tight cannabis supplies prompted Alberta regulators to change the rules. Then, think about January and February when the crop supply is lower.
“It’s just going to get worse,” he says.
Indeed, while the Ipsos poll indicates the legal cannabis market in Canada could possibly double, it lists concerns over price as a mitigating growth factor.
“Only time will tell,” Macey says. “I don’t think the black market is totally going to disappear but it’s still early days.”
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Macey says she suspects that part of the reason a substantial number of Canadians haven’t switched over to the legal market is the difficulty in accessing the products legally that they’ve long been able to access illegally with little discomfort. Edibles, for instance, are not yet legal.
“Those people are absolutely going to go back to the black market because they’re not going to sit around waiting,” she says.
Other people are probably sticking with their dealers because they like the product they were getting and aren’t yet able to get that particular product legally, Macey says. The Ipsos poll found that while 58 per cent of people found legal cannabis easy to purchase, the rest disagree: 16 per cent said shortages meant they couldn’t purchase it legally at all.
Product issues and supply shortages are a problem Dawkins lays firmly at the federal government’s door. Producers could only apply for micro-licenses the same day legalization became official, he says, meaning they won’t necessarily be able to put product to market any time soon.
“Customer satisfaction will go down as product shortages stretch out into the next year,” Dawkins says.
It’s worth focusing on the appetite for legal cannabis, says Jenna Valleriani, a postdoctoral fellow in medicine at the University of British Columbia.
“I see where those disheartening thoughts or experiences really come from,” she says, but Valleriani notes that even the transition to a medical cannabis market was quite “turbulent.”
“Trying to undo purchasing patterns that people have had for decades, I think that takes time.”
Frankly, Valleriani says she’s surprised the number of people who say they’ve stuck with their old weed avenues isn’t higher given the issues that have dogged the newly-legal industry.
“There has been a lot of problems with supply and access,” she says.
Think of people on fixed or limited incomes who can’t afford to cover the cost of packages and shipping or don’t have a permanent address or credit card that sites like the Ontario Cannabis Store demand, Valleriani says.
“What do you do?”
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