Vibrant black market persists as legal pot marks its first full year in Canada – CBC.ca

\Vibrant\ black market persists as legal pot marks its first full year in Canada - CBC.ca
Quebec to offer legal cannabis at $4.49 a gram, beating grey-market price
A year after Canada introduced the legal, recreational cannabis market, the "vibrant" black market for marijuana remains a problem, says the Canadian Association of Chiefs of Police.

"We haven't disrupted the black market significantly at this point, but that was to be expected," said Abbotsford Police Chief Mike Serr, who chairs the Canadian Association of Chiefs of Police drug advisory committee.

There was an uptick in some U.S. states after they legalized pot, but Lee said that was likely due to the fact that edibles — with their stronger, longer high — came on the market there right away. In Canada, there has been a year-long wait, with edibles and other cannabis derivitives becoming legal Thursday.

Sky didnt fall: Police, lawyers still adjusting after pot legalization

"If there is a strong, vibrant dark market out there selling illegal drugs, people will go to that and we need to direct them to the legal market."

Statistics Canada says 541 people were charged under the federal Cannabis Act between Oct. 17, 2018 and the end of the year. That includes 190 people charged with various selling offences and 95 people charged with possessing illicit cannabis or more than 30 grams.

How Alberta emerged as Canadas unexpected pot capital, one year post-legalization

When the Liberal government legalized recreational marijuana use exactly one year ago, it promised to siphon away the black market's customer base and keep their money out of the hands of organized crime.

"The cost of legal cannabis is still too high. Barriers for medical access are still too high. And access to high-quality cannabis is also being stymied," said lawyer Harrison Jordan, who advises individuals and businesses on cannabis law.

Given its illegal nature, it's hard to get a handle on the size and value of the black market — but according to Statistics Canada, just 29 per cent of cannabis users say they get all of their product from a legal source.

Lee said there have been few cannabis-impaired driving charges and she suspects the tests arent more widely used because police and prosecutors are still skeptical of the science and wary of going to court.

And four in 10 Canadians told StatsCan they bought at least some of their cannabis from illegal sources, including street dealers, between April and June of this year, according to the agency's most recent figures.

"They dont want to engage in a course of conduct … that might lead to a finding that the laws unconstitutional and jeopardize the ability to use those laws in more significant circumstances."

Serr said whoever forms government after Monday's federal election will have to start putting more resources into fighting online sales.

Jordan said hes heard from a lot of people slapped with $200 tickets for having cannabis readily available in a vehicle when they had it in a closed bag, which is allowed under Ontarios law.

"The public don't know that when they're going online, typically the first three or four sites that will come up online will be illegal sites to purchase cannabis," said Serr. "We're working nationally to try to find some solutions."

Economics professor Michael Armstrong has been studying the cannabis market. He said three factors — cost, location and supply — have kept the black market booming.

"Police officers have been out there saying theyve seen no problems since legalization. Well, they havent had the tools. They havent had the training," said Murie.

"[In] Ontario, we had no stores for six months. Now we've got 25 and we're still waiting for the next 50. That means the legal industry is missing an opportunity to sell product and take a bigger bite out of the black market," he said 

In the past year, Alberta and Manitoba have each issued more than 2,000 tickets under provincial laws, while in Ontario there have been more than 7,000 provincial charges.

Using crowdsourced data, Statistics Canada reported that a gram of cannabis purchased from government-approved retailers cost $10.23 in the third quarter.

"Weve got a long ways to go to make sure that weve got fair and sensible regulations, but cannabis is legal and we should be very proud of that," said Lloyd.

Statistics Canada has urged caution when interpreting its cannabis numbers, since the data are self-submitted.

Police, lawyers and advocates say that one year into cannabis legalization, Canada has a long way to go toward stamping out the black market and pot-impaired driving.

"People find that the black market is servicing them a lot better than the legal marijuana stores," said Brown, vice-president of the Criminal Lawyers Association.

"We cant call it a success at this point," Chief Const. Mike Serr of the Abbotsford, B.C., police department said of the law change a year ago Thursday.

While the black market persists, Serr said other worries about legalization — such as fears of a spike in impaired driving stats — have turned out to be overblown.

"Where a charging officer wants to send a message theyll go with the federal criminal charges, as they carry more of a stigma and more of a weight."

"Overall, I think we can say it was more or less uneventful," he said. "The sky didn't fall, as some may have predicted."

Statistics Canada doesn't provide a breakdown of marijuana-related driving offences, making it hard to describe the impact of cannabis legalization on drug-impaired driving.

Kyla Lee, founder of the Canadian Impaired Driving Lawyers Association, has been monitoring the impaired driving caseload and said there hasn't been a marked increase in cannabis-impaired driving since legalization.

Under the new impaired driving law, police can demand a breathalyzer test from any driver pulled over for violating traffic laws or at a check stop.

"When this legislation was introduced, and as we were approaching legalization, I was really critical … of what the police might do with the new powers that were given to them," she said, adding police have been using those expanded powers "in a very appropriate way."

"I don't see any systemic overuse of their authority when it comes to impaired driving investigations," she added. "And that gives me a lot of comfort as a defence lawyer and as a citizen."

Catharine Tunney is a reporter with CBC's Parliamentary bureau in Ottawa. She previously worked at CBC in Nova Scotia. She can be reached at [email protected] or @cattunneyCBC.

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Cannabis company Hexo Corp. says it is aiming to undercut prices in the illicit market with its new 28-gram product, that costs as much as one dollar less per gram than at a illegal dispensary.

Hexo says the product will be on sale in Quebec cannabis stores for $125.70 taxes included, or $4.49 per gram.

Statistics Canada’s latest price analysis based on crowdsourced data showed that the average cost of a gram of cannabis was $7.37 during the third quarter, with the price of legal and illegal weed slipping to $10.23 and $5.59 per gram, respectively.

Hexo chief executive Sebastien St-Louis said the product under the brand name Original Stash is aimed at the half of Canadians who are continuing to buy pot from the illicit market one year after legalization.

He said Hexo is able to offer a one ounce, or 28 gram size, product at this price point for various reasons, such as less plastic packaging required for the larger size, its increased production scale and lower hydroelectric costs in Quebec.

Original Stash will be between 12 and 18 per cent THC, the company said. It will be for sale in Quebec starting Thursday.

28 grams is a far larger container than is usual in the Canadian legal market, though grey-market sellers often sell in bulk and offer bulk discounts.

Hexo said it worked with Quebec’s provincial cannabis corporation on the pricing strategy and is in discussions with other provinces and territories.

Quebec’s monopoly cannabis retailer has several dry flower products for under $6 a gram, but this will be its first under $5.