Negatives of Illegal Cannabis
It has now been 13 months since Canada became the first industrialized country to legalize cannabis. The initial stages of the legal market have been far from perfect, but we’ve been seeing steady growth, and with edibles and other derivatives set to hit cannabis store shelves in December, the legal market will only continue to expand.
Of the nearly 5 million Canadians who purchased cannabis last quarter, over 40% said they still purchased some of their cannabis from illegal sources. One of the biggest issues surrounding legal cannabis, and the biggest reason that so many consumers continue to turn to illicit sources, is price. Black market cannabis is cheaper, no two ways about it. That being said, price is not the only factor — or even the most important one — for many Canadians. Three quarters of Canadian consumers cited quality and safety as their first priority, with 42 percent citing price.
Buying the cheapest option isn’t always worth it in the end. A big part of the reason that black market cannabis is cheaper than its legal counterpart is because illegal producers don’t have the same overhead and oversight. There’s no quality control, no third party testing, and in many cases no real testing of any kind. This may not sound like a big deal to many recreational consumers — after all, black market cannabis has been the only option here for decades — but it is a big deal when you start talking about medicinal patients who are more susceptible to mold/fungus/pesticides etc.
This is not to say that the legal producers are perfect. Just look at all of the issues surrounding CannTrust; their license to produce has been revoked, and provinces are returning all of their products. While this certainly doesn’t help supply issues, it does point to the fact that oversight is working. With time, prices should drop and the illicit market should shrink. A big part of the reason that illegal cannabis is still so much cheaper is that it has a huge new source of competition that will only grow over time.
We’re not saying that legal weed shouldn’t be cheaper than it is, but just because the illegal stuff is cheaper doesn’t make it a safer or a better option. Buying legal is also a better option if you are seeking cannabis for specific purposes, like pain or anxiety relief. You are far more likely to be able to get accurate information about the compound profiles of legal cannabis (THC and CBD%, terpenes, etc). This is particularly relevant for more sensitive patients, or for those new to cannabis.
Oversight and third party testing also becomes more important when you start considering edibles, topicals, oils and other derivates. When you can’t actually see and smell the dried flower, you put a lot more faith into the supplier of a given product.
The potency and efficacy of edibles and extracts can vary wildly depending on how they’re made and what strain or part of the plant is used. This is a big part of the reason many people choose to make their edibles at home, so that they know what’s going into them. Once these products hit shelves in December, it will be one more good reason to buy from licensed cannabis stores.
Another big reason not to buy illegal cannabis is that it doesn’t support the legal market, and doesn’t generate any of the other benefits associated with legalization. There’s no question that legalizing was the right move, and that a legal market is preferable to a black market, but these things don’t happen overnight.
It’s easy to forget that the legal sale of alcohol, for example, had its own issues for years after prohibition was ended; you needed a permit to purchase alcohol in Ontario until 1962, 35 years after the sale was legalized. Thankfully we live in a different time now, and there are many factors at work that will spur the cannabis market quickly forward.
Canada’s federal and provincial governments generated $186 million of new tax revenue in the first five months of legalization. That number was actually lower than expected, largely due to early supply issues. In the next few years that number will grow well into the billions, and that’s a lot of money to spend on other projects. A larger legal market also promotes medical research, the development of new products, higher quality and lower prices due to more competition, and so on.
There is also a very real possibility of Canada becoming the preeminent legal cannabis market in the world, which is a great opportunity. It generates jobs, trade, income, and all the other things any major commodity export would. Some reports indicate that by 2022 we should eclipse California as the largest legal Cannabis market in terms of revenue, which is no small thing.
We have hopefully witnessed the turning point in global attitude towards cannabis, and as more countries legalize it will be a great opportunity for Canadians to capitalize. With the number of countries legalizing medical cannabis consistently increasing, its only a matter of time before recreational legalization follows suit. Canadian cannabis has the potential to became a major export, and to that end the larger and stronger the legal market, the better.
So at the end of the day, there is more to consider than just price when talking about the merit of legal or illegal cannabis. Quality, safety, selection, revenue, jobs, global standing, opportunity, research, and the list goes on. Full legalization is a great thing, and the government and consumers both have their roles to play in shaping the future of the market.
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