The sale of cannabis has been legal in Canada for over five years now, but its illicit sales are still flourishing due to lower prices and better quality, according to a recent study.
Consulting firm Deloitte published a study, which found that the two major areas where illegal cannabis sellers outperformed legal retailers were in pricing and a greater variety of products for the consumer.
The study gathered data from 624 legal cannabis store websites and compared it with 57 illegal online retailers over a period of two months last year.
The study did not include data from legal retailers’ brick-and-mortar stores or any government-run outlets.
The illicit sites tend to put more of an emphasis on selling strictly ready to smoke dried weed and extracts, whereas many legal vendors offer cannabis-infused beverages, gummies and vape cartridges.
“It’s mostly the strain variety, but also just the sizes,” Deloitte’s Christopher McGrath told National Post. “You can buy kilograms from these online websites, whereas legal sites cap you at 30 grams.”
Despite their illegality, these sites are open about the products that they are selling, including other drugs, which aren’t legal for authorized retailers to sell like magic mushrooms and LSD.
“It didn’t seem like they had any fear of enforcement,” said McGrath. “There’s a lot of confidence in the illicit market that there will be no enforcement.”
The average price on an illicit site is about $6.24 per gram, whereas licenced sites offered an average price of $7.96 per gram.
Those price gaps widen even further depending on how much one buys.
A 3.5 gram purchase can be as much as 67% cheaper on an illicit site than what it would cost on average on a legal one.
It’s not hard to tell why in times of economic stress, Canadians are choosing the cheaper option, despite its lack of legitimacy.
“One year after legalization, 52% of Canadians obtain (at least some of) their cannabis from a legal source (compared to 22% prior to legalization),” reads a statement from Public Safety Canada.
“However, it seems that Canadians are still obtaining their cannabis from the black market. In the third quarter of 2019, results from the National Cannabis Survey show that 42% of Canadians had purchased cannabis from an illegal source.”
MaryJane’s Cannabis store owner Samuel Gerges, thinks that the federal government needs to go back and correct some of the mistakes it made when first legalizing the drug.
“Governments should avoid making similar mistakes for the sake of market expansion, such as more permissive advertising regulations,” said Gerges. “There’s not two licenced producers or retailers that are happy with the state of legalization, even the ones that are doing well,” Gerges told the National Post.
“(Prime Minister) Justin (Trudeau) wanted to race to be the first to legalize as a country, now we’re also going to be the example of what not to do.”
