Canada’s regulated marijuana industry is booming, but what about black market sales?
Whenever experts and cannabis enthusiasts discuss the presence and accessibility of weed in a country, the notion of legalization is always in the foreground. People want to know if their countries or states are making efforts to legalize cannabis so that it is easy to access weed without getting arrested.
This interest in the legality of cannabis has led countries around the world to legalize cannabis immediately. Despite these efforts, the cannabis black market is thriving in most countries and is an important part of the discussion. The big question has always been: “Will the black market go away?”
The regulated cannabis market in Canada
Canada in particular has done so well with its regulated cannabis industry, and a recent study found that 70% of participants bought cannabis in the regulated market rather than the black market. Canada currently has one of the largest legal adult cannabis industries in the world.
Uruguay is the only country that has legalized adult consumption so far, but the country is still grappling with the pitfalls of the black market. In comparison, Canada has 37.5 million inhabitants, which is 1/10 of the population of Uruguay.
But numbers and a larger population aren’t the only reasons Canada’s regulated market is thriving, and more and more people are getting their cannabis from licensed locations. Canada also has an open adult industry that is accessible to all persons of legal age (including non-residents). On the other hand, in Uruguay, only residents can make such legal purchases.
As a result, Canada’s legalization system is smoother, more accessible, and more flexible. Any country that offers its cannabis users such an easy process will enjoy the dividends of a regulated market. Canada is doing something no other country has done before, as cannabis is still illegal at the federal level, even in the United States of America.
Why do consumers rely on black market cannabis?
There are numerous reasons to rely on black market offerings despite several governments legalizing cannabis. A most prominent reason from a recent poll shows that people see the government’s pot as “too expensive”. They don’t want to pay that much money for what the government is selling through their regulated market. Delivery times are unacceptable for some others as the products require government quality control staff to inspect them before shipping.
Of course, the government is taking these measures to ensure that its citizens are getting the best, healthiest cannabis. If the government checks and scans the weed, why do people still prefer the unsafe black market week?
This is an exciting question because it shows how many people are willing to take risks with the black market rather than get a safe and healthy product from the government. The solution to such a thought process is awareness-raising and intense government campaigns highlighting the dangers of buying cannabis in unregulated markets.
The Canadian government took its cannabis regulation ambitions seriously because it wanted to achieve certain goals; Limiting children’s weed exposure, protecting adult consumers and creating a safe supply of legal cannabis.
Canada’s regulated market continues to grow side by side with its dwindling black market, and the country has accomplished this feat by consciously increasing sales and production. Let’s find out how they did it.
Canada’s Solution: The Role of Big Production and Increased Sales
A prominent reality with almost all legal cannabis sectors is that sales usually start at a slow pace and get better over time. While the larger parts of total sales still come from unregulated markets. This scenario matched Canada’s reality and made it very difficult for licensed companies to gain an advantage over unregulated companies.
The black market had problematically the upper hand, but the government changed the tide against the black market as a proactive country. The initial problem was the lack of many licensed companies creating a system in which demand was greater than supply.
The Canadian government issued licenses for cannabis producers from a total of 657 licensed producers on the Canadian market. The increased number of producers meant that demand matched supply, and people began to buy cannabis in regulated markets.
Unlike other countries that are not taking action against the black market, Canada has used two viable business models to change the situation. The first was an increase in production and the second was sales. While increased production boosted sales, and sales means more people are shopping in the regulated market.
What is happening to the black market?
Canada has done a great job with its regulated market, which doesn’t mean it will suddenly get rid of its black market. The unregulated market will not go away because there are many licensed producers. Some people will still want to bypass the regulated market, and the black market will cater to their needs.
There are still unregulated markets in Canada for other sectors such as alcohol and tobacco. However, the government is trying to get the upper hand on the regulated market by ensuring that black market activity is suppressed.
The goal of suppressing the market is the first step to complete eradication, but it has to be a gradual process. The unregulated market will always exist (that’s a fact), but that doesn’t mean it will always be. Countries just need to make sure they are keeping a close eye on the black market while strengthening their regulated market.
Those who oppose the cannabis legalization system in countries like Canada always mistakenly assume that a black market in a country is a sign that the legalization process is a failed attempt. But from everything we’ve learned about Canada’s legalized system, it’s obvious that cannabis legalization works on both a national and local level.
Canada did everything right from the start and has become a role model for other countries trying to suppress the large reach of the unregulated market. If Canada can do this, other countries can do the same with their regulated market so that users and cannabis enthusiasts can legally buy their favorite weed.
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