It was supposed to dry up the black market of cannabis and a source of important funds for criminal groups. At least that was one of the hopes, if not a goal, of the Liberal government when it legalised recreational use of cannabis and the control of sales through licensed outlets.
Several analysts had said that squeezing out the criminal element and black market sales would only happen if prices for the legal product were competitive with black market street sales.
About nine months after licensed outlets began sales in an often rocky start due to shortages, it seems the black market and criminal elements haven’t been hurt much, if at all.
In fact what’s happened is the street price has fallen, while the legal price has risen in some cases 80% more than the street price, to over four dollars difference per gram.
Statistics Canada, the national statistics gathering agency, says the number of people buying from the street or from unlicensed operations rose slightly in the past three months to 59 per cent from 55 per cent in the previous three months.
The information comes from voluntary responses to the agency’s queries, and which were deemed as “credible,” along with information gathered from online illegal cannabis sellers.
As to why there has been an increase in buyers on the black market, only a small percentage said it was due to difficulty in accessing legal stores but rather that legal cannabis was too expensive.
The StatsCan report says average street prices per gram fell from $6.23 to $5.93 per gram while legal outlet prices rose from $10.21 to $10.65 per gram
Part of the higher prices for legal producers and seller is due to a host of added costs to their product, not to mention that legal sales have sales taxes added on.
- Statistics Canada: crowd sourced cannabis prices second quarter 2019
- CBC: P Evans: Jul 10/19: Illegal cannabis getting even cheaper
- BlogTO: L O’Neil: July 10/19: Black market prices drop since legalisation
- Canadian Press (via CBC): A Ligaya: Jul 10/19: Cost of gram of illicit weed drops
- CBC: Jun 7/19: Toronto uses concrete to block unlicensed cannabis outlets