Weed black market in Canada thriving

Source:AFP Published: 2019/4/16 18:53:40

Supply problems continue six months after legalization

High prices, short supplies and lineups at stores: Six months after Canada legalized recreational cannabis, consumers are still buying a lot of pot on the black market as legal sources fail to meet demand.

But authorities say the legal market will eventually put street dealers and criminal gangs out of work, once the fledgling industry finds its footing.

"There are clearly still issues in the supply chain," said Minister Bill Blair, Prime Minister Justin Trudeau's point man on cannabis legalization.

In October, Canada became only the second country to legalize recreational cannabis, five years after Uruguay.

But six months on, people queue in long lines outside outlets, and supplies of many popular strains have dried up.

A patchwork of public and private online portals and bricks and mortar stores have popped up across the country, as each province rolled out their own marijuana retailing framework.

Getting rid of the black market was a key objective in Trudeau's legalization plan.  Many feared a surge in drug-­impaired driving and pot-related emergency room visits, but authorities said that has not materialized.

In the last three months of 2018, the lion's share of sales - 79 percent, valued at C$1.2 billion ($900 million) - were by illicit dealers.

According to Statistics Canada, legal sales - including medical marijuana, which has been allowed in Canada since 2001 but accounts for only a fraction of total consumption - amounted to only C$307 million.

Canada has one of the world's highest rates of cannabis use - with almost 15 percent of the population or more than 5 million people having consumed pot.

Its supply shortage can be explained in part by the heavy licensing process imposed by the federal government.

Another reason put forward is the relatively short amount of time growers had to ramp up - about four months from the time the cannabis legalization law was passed by parliament to its entry into force. As a result, the average price of dried cannabis in Canada has increased by more than 17 percent since legalization, to C$8.04 per gram, according to the government statistical agency.

Buyers of legal pot are paying on average 57 percent more than for cannabis purchased on the black market, which actually saw prices fall.

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