Illicit Black Market Cannabis Dealers On The Rise

Illicit Black Market Cannabis Dealers On The Rise

As of 17 October 2018, recreational use of cannabis was no longer considered a violation of criminal law. The legalization fell under the same regulation to how alcohol is controlled in that it limits home production, distribution, consumption areas, and sale times. Although there was a deregulation of cannabis, there was a strengthening in punishment for those supplying the substance to minors or driving while impaired.

After the new year turned over, online sales of cannabis have taken off, but not in Alberta. That hasn’t stopped some black marketers from using the platform. Legal cannabis retailers are calling on the government to crack down on the black market. It’s unforeseen, and illegal, competition that is undercutting the considerable investment legitimate businesses have made to offer cannabis products to the public. The issue is, black marketers within the province are openly operating online with little repercussions, while certified businesses in the province are barred from using the platform to sell and distribute their products.

On the other side, black marketers have indicated that their product helps ease the supply shortages because the demand is so plentiful right now. Federal Minister, Bill Blair, stated recently that the best weapon against the $16-billion black market is successful legalization that ensures competitive prices and safe products. He added that he’s confident that nearly 50% of cannabis sales now are legal.

However, that hasn’t helped quell the concerns from legal retailers who believe that not enough is being done to address those who are skirting the law. Conversely, business owners believe that opening up the law to allow online sales will help them better compete and drive out those who are illegally providing the substance. Perhaps, as alluded to before, the problem lies in the supply.

Oversupply Could Carry Its Own Risks

Industry experts purport that while there is a shortage now, that won’t be the case in two years if licensed producers (LPs) execute their business plan. LPs are worried about this phenomenon because it’ll mean a drop in prices in cannabis at retail, which will ultimately drive down their profits at wholesale. Regulators, LPs, and retailers all agree in saying that a stable, cost-competitive supply will push out the black market, which for now is flourishing. At the end of 2018, illicit sellers held 80% of the market, so you can easily see certified retailers have ground to make up.

The Alberta Gaming, Liquor & Cannabis (AGLC) plans to issue five new licenses every week if the supply keeps increasing. There was a stoppage after only 20% of the marijuana Alberta had ordered delivered. Alberta remains the leader with more than 100 cannabis stores open province-wide, with sales back in March in Alberta reaching more than $14 million in a quickly growing industry that hit $60.5 million nationwide that month.

At Verhaeghe Law Office, we stay updated on all developing law trends for our clients. For more information about us or if you need legal representation, please contact Verhaeghe Law Office at 587-410-2500

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