There’s a Black Cloud Hanging Over the Cannabis Market
By Tania Moffat
Weed is legal, so no one has to worry about back alley deals anymore, right? Wrong, the black market is alive and well. In fact, it’s doing so well that a recent industry analysis conducted by Scotiabank estimates that illegitimate businesses will account for over 70 per cent of all cannabis sales in 2019. These sales aren’t being made by some guy in a leather jacket, meeting clients on a shady street corner either. Today’s black market cannabis retailers are high-class charlatans with professional looking websites and chic physical stores offering a tantalising array of cannabis goods. But for a few telltale signs, they look legal and attract several customers who aren’t even aware that they are supporting unlawful businesses. Unfortunately, this is a trend that is harming all of the legitimate store operators and growers who have had to jump through hoops to open their stores.
Cannabis hasn’t even been legal for a year yet, and of course, the black market isn’t going to disappear overnight. These numbers are disheartening but not surprising given the logistics of launching legalization nation-wide. Health Canada was drowning in applications long before the legalization date last October. Growers were cautious too, delaying their grow operation set-up until they were confident the cannabis act would pass. Many retailers, such as 5Buds, didn’t open until much later than October 17. In some markets, such as Winnipeg, supply was an issue with stores selling out of product only hours after they had opened. Still, other areas lacked access to any available legal retailers. With a slow and bumpy start to such an anticipated industry, it’s no wonder illegal stores and sites took full advantage of the legal market’s logistical nightmares.