The Truth About Cannabis Legalization in Canada (article)

just_the_flu

they say im crazy but i have a good time
Since when is too much demand considered a business failure?



...the problem in canada is there is not a lot of legal suppliers, and they were not setup pre-legalization to take the black/grey markets over... the black and grey markets are over supplied....


...there is a lot of cannabis available in canada, just not through 'legal' outlets...
 
just_the_flu,
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BabyFacedFinster

Anything worth doing, is worth overdoing.
On the Modern Cannabists the other night, Sneaky Pete was talking about the woes of buying mail order cannabis in Canada. He talked about spending good money for weed that was packaged almost two years ago and not even sealed well. What arrived is this shitty, dried-up crap with no refunds possible.

It wouldn't take more than 1-2 experiences like this to turn me back to the black market.
 
BabyFacedFinster,
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Planck

believes in Dog
Hairy warts and all I am still delighted to be in a legal country.
It's no perfect for sure and some mistakes made seem so obvious one goes WTF. A big one was not letting producers produce early enough to meet demand WTF. Another is we kind of want it legal but don't want to condone usage. This product must come in sealed packaging because see above. Porn shop syndrome.

BUT the biggest factor is GREED from every corner, surprise huh. Legal is 3x the price of grey market and grey market is 3x in quality. I expect more would accept the high price if they were getting top shelf but it's a crap shoot and you can not examine prior to purchase.

Special interest groups push their agenda to save the children and mack a buck doing it. Business as usual.

You can grow your own in most provinces, Manitoba no and Quebec I dunno they flip flop. The Feds want legal to grow nationwide. This is the best route but some are unable to for various reasons.
 

hans solo

Left coast Canada
On January 1st British Columbia is increasing the PST on inhalable extracts and consumption devices from 7% to 20% 14 days after product release. On one hand government higher ups say they want to grow the legal cannabis business with the other hand they are pounding nails into the legal markets coffin.
 

Planck

believes in Dog
On January 1st British Columbia is increasing the PST on inhalable extracts and consumption devices from 7% to 20% 14 days after product release. On one hand government higher ups say they want to grow the legal cannabis business with the other hand they are pounding nails into the legal markets coffin.

I have to wonder are they that greedy and that stupid or are they being well paid and played by grey/black market interests.
 

hans solo

Left coast Canada
Greed ,lack of knowledge , and an attempt to perpetuate the stigma surrounding the plant.
The goal is to stamp out juveniles vaping nicotine, the result is reduced sales of products that in the US are a big segment of the industry .
 

Planck

believes in Dog
Greed ,lack of knowledge , and an attempt to perpetuate the stigma surrounding the plant.
The goal is to stamp out juveniles vaping nicotine, the result is reduced sales of products that in the US are a big segment of the industry .

Agreed for the most part. There are many factors involved in the crusade against nic vaping. It's no coincidence that the most anti vape states are also the states that horrible mismanaged the funds they get form big tobacco through the master settlement agreement. Bond dividends are coming due and they don't have the cash. The whole mess is a study in corruption.
 

Tranquility

Well-Known Member
What do you call it when the legal price goes up and the illegal (black market) goes down?

Canada.

One good thing is that legal is sure to come down by decree or market. For instance, the article lists an ounce of "Original Stash" for about a buck and a quarter. ($125.70 CA with taxes included.)

https://cannabislifenetwork.com/cannabis-price-gap-increases-as-illegal-cannabis-prices-fall/
The gap between what Canadians pay for legal and illicit cannabis is widening — a sign, experts say, points to the need for the cannabis industry to make prices a priority this year.

Statistics Canada said Thursday that the average price of legal cannabis increased to $10.30 per gram in the period between October and December 2019 from $9.69 per gram the year before.

The change came as the average price of illegal cannabis fell to $5.73 per gram in that fourth quarter from $6.44 per gram a year earlier and as the overall average price of cannabis rose to $7.50 per gram, an increase from $7.46 per gram a year earlier.

The agency based its conclusions on price quotes gathered using its StatsCannabis crowdsourcing application between Oct. 1 and Dec. 31. Out of 291 price submissions, 248 of were deemed plausible, it said.

The data comes as the industry is grappling with how to minimize the underground cannabis market — one of the key reasons why the country chose to legalize recreational cannabis in October 2018.

Some dispensaries reported being busier than before in the months following legalization, even as police departments and governments conducted raids to force many illegal cannabis stores to shut their doors. The industry’s efforts to stamp out the illicit market, however, have been plagued with supply constraints and in some regions, a lack of physical cannabis retailers, hampering access for those unwilling or unlikely to buy the substance online.

“Legal cannabis has been priced much higher than the black market ever since legalization day,” said Michael Armstrong, an associate professor at the Goodman School of Business at Brock University in Ontario.

“I think for any of the mass market producers, (price) has to be their objective for this year, if it hasn’t been already.”

In a bid to undercut the illict market, licensed producer Hexo Corp. rolled out Original Stash, a 28-gram product in Quebec cannabis stores for $125.70 with taxes included, or $4.49 per gram, in October.

At the time, Hexo chief executive Sebastien St-Louis said his company was able to offer it at that price for various reasons, such as less plastic packaging required for the larger size, its increased production scale and lower electricity costs in Quebec.

When Armstrong recently checked out the Ontario Cannabis Store website, he spotted a few products costing $5 or $6 a gram, but said, “those are still in the minority.”

There is also a patchwork of prices across the country.

Statistics Canada’s data shows Quebec has the lowest legal cannabis prices in Canada at $7.88 per gram and Ontario has the highest illegal cannabis price with an average of $6.21 per gram.

Meanwhile, New Brunswick had the lowest price per gram of illegal cannabis at an average of $4.90 per gram, but the highest price for legal cannabis at $11.36 per gram.

Lowering the price of legal cannabis to match illegal rates can be tricky, but is possible, Armstrong said. Greenhouses growing cannabis are labour intensive because they often require plants to be moved, trimmed and harvested, but automation and improved floor plans can help.

Provincial wholesalers and retailers have their work cut out for them too.

“The first year, efficiency wasn’t really a big issue because there was a shortage of product, so you can sell it priced at $10 and sell out…but going forward price has to be an issue,” Armstrong said.

Omar Khan, the national cannabis sector lead at Hill+Knowlton Strategies, said in an email that a lot of work the industry has to do is being driven by two factors.

He said the illicit market faces no costs related to regulatory oversight and is “intentionally low balling prices in order to retain market share.”

“This combined with their ability to offer greater product variety and the slow rollout of licensed retail stores across Canada gives them a competitive edge with respect to the legal market,” he said.

Khan also said he has noticed that licensed producers are seeing their margins squeezed by excise and sales taxes, pushing producers to set higher wholesale price points to retain profitability.

“Today’s data shows that the stated policy objective of the federal and provincial governments to illuminate the illicit market is just not happening,” he said.

“All levels of government need to take a serious look at what policy levers can be deployed to reduce unnecessary regulatory burdens so that licensed retailers and producers can effectively compete against those who chose to operate outside of the law.”​
 

Haze Mister

Verdant Bloomer
Manufacturer
"We hate you and we hate having to accept a change in the law. Now, let's see how we can bleed you dry".

And what they hate most of all is the idea that some guy can make a decent living without being a 9-5 wage slave. One plant grown in a closet can make 1000s of seeds and this REALLY irks them.
 
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