One of the goals of Bill C45 was to eliminate the black market and get cannabis out of the hands of organized crime. Based on discussions with friends and neighbors, I don’t know if it will make much of a difference, especially in the short term. Few people who I have spoken to who consume cannabis regularly say that they will buy from legal government approved channels once legalization takes place on October 17th. Reasons for not using legal channels include price, convenience, product quality, and a good healthy distrust for our government.
Would you pay more to buy something in a store that you now get delivered to your house at a fair price by a friend? Many are saying no to this question. This is an issue of both price and convenience. Maybe getting price more in line with black market pricing would convince more people to purchase through legal channels. With wholesale prices in the medical market at a low, maybe there is some room to get pricing lower and squeeze the black market a little. Although price is important, it won’t bring everyone into legal retail, having a store near to you will also be a challenge.
In Ontario, the OCS has identified 29 locations to service the province. The LCBO has 860 locations including corporate stores and agency stores. 29 stores along with an uncertain future for private retailers may not provide the necessary coverage to properly service a likely underestimated market for cannabis. At least in the first few years of legalization, convenience will impact the decision of buying through legal channels.
Although I don’t know if the quality of what will be available for sale through legal cannabis retail will be better or worse than what is available through the black market, some cannabis users feel that this will be an issue. Without the ability to market the product, it may be hard for cannabis producers to fight this perception. Maybe a decrease in the marketing restrictions would be beneficial for a legal cannabis market? The black market channel has a strong word of mouth marketing campaign and a surprising number of black market providers using social media to advertise and drive their business.
Another quality concern seems to stem from a sentiment that the government will water down the weed. Worries that restrictions on potency will lead to a lesser quality product seems to be a common concern whether or not there is truth to it. The other concerns about buying through legal channels are that people don’t want the government to know that they use cannabis. This is likely just a stigma thing that will go away with time as cannabis becomes a normal part of our culture like a having a wine or a beer.
My advice? Grow your own.
David Kurth, CEO (AKA: Chief Business Hippy)
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