Cannabis users and growers still turning to black market

Nov 16, 2018

As the legalization of cannabis settles in, coming up on the one month mark, there are many challenges which have arisen in the legal sales arena. There have been issues across the country with the legal dispensaries, either online (ON) or store fronts (NB, QC) running out of product and experiencing website glitches. These bumps in the road for legal sales have meant that many recreational and medicinal users are turning to the black market to obtain their products.

Black market filling the holes

The black market for cannabis sales obviously existed prior to the legalization of cannabis last month, and just this fact alone means that they have a head start in sales. Many users, medicinal and recreational, are going to be hard to bring around to purchasing from legal sources. There are two main reasons for this, the first being that the legal sites (storefronts or online stores) have been running out since they opened their doors. Some have completely run out of all products, and have had to close their doors, while others are simply at very low stock and/or long wait times to obtain the product as things are on backorder.

As well as running out of products there are numerous products which will not be available legally until next year, such as edibles, which includes such things as cannabis-infused foods (from cakes to candies) as well as drinks. Cannabis concentrates are another product which will not be available via legal dispensaries until next year. The black market will have a stronghold on all of these, still not purchasable cannabis products, for at least a year, which also means buyers keeping their relationships with their illegal dispensers.

The second reason for a user choosing the black market is price. Particularly for those users who were already set up with a place to purchase, prior to legalization, deciding now to pay much more for the same thing they can already get, is a hard sell. There is variation from province to province with the cost of product from stores versus street, but the prices in stores can be up to $15 a gram with the average price on the street ranging from about $5 (Alberta) to around $7 (Ontario). It also seems that because the prices are high on the legal market it may have led to a drop in prices in the black market.

Black market seeds

The black market is not only for the prepared product either, the black market seed market has also seen a boom since the legalization of cannabis, mostly due to the lack of legal seeds outside of the medicinal cannabis system. The owner of Ontario-based vendor Dr. Seeds said the gross sales in October, which is typically a slow month for seed sales, were double the past monthly average, at over $12,000. This is no doubt due to the fact that many legal dispensaries, across the country, are not even selling seeds yet.

“We have not issued a purchase order for seeds at this time because there is currently not a source available,” said Beverley Ware, the communications adviser for the Nova Scotia Liquor Corp.

Nova Scotia is not alone in this as the BC Liquor Stores, the Alberta Gaming, Liquor and Cannabis agency, the Ontario Cannabis Store also do not have seeds available as of yet. They have all said that they do plan on selling the seeds when they are able to obtain inventory, but were unable to offer any sort of timeline as to when this would occur.

If someone is purchasing seeds or any cannabis product, from black market dispensaries, it is an illegal act as the Cannabis Act lays out very specific rules that require legal purchase of all cannabis products.

“In the Cannabis Act, seeds and seedlings are cannabis … so they are subject to all the restrictions on the sale, the propagation and the distribution of cannabis,” said Trina Fraser, a co-managing partner at Brazeau Seller Law, “If you grow plants [from illegally acquired sources] in your home, that’s still illegal, even if you’re doing no more than four plants, the mere fact that those seeds were not acquired from a legal source – you’re still committing an offence.”