The scenario this headline suggests is unusual… very unusual indeed! Legal cannabis sales surpassing those on the black market in Canada ? We all know that the trade in products classified as "narcotics" is the domain of drug traffickers, not legitimate retailers. This isn't a new phenomenon. However, as always when it comes to cannabis and related products, this country is once again leading the way. This proves that when the government and legislature get involved, the nation benefits! With that said, let's explore this topical issue together.
A look at the figures
Indeed, the statistics supporting the claim that legal recreational cannabis sales in Canada exceed those of the black marketdate back two years after legalization, specifically to the third quarter of 2020. This data was published by the Central Bureau of Statistics. In this regard, related spending amounts to CA$824 million (€534 million). Meanwhile, black market spending during the same period is estimated at CA$754 million. This may seem insignificant to some, but that's precisely because another figure is missing.
In fact, in the third quarter of 2018, a period when illicit sales had no competition, drug traffickers were living the high life! Their sales were estimated at CA$1.3 billion. So, we've gone from CA$1.3 billion to CA$754 million. Do the math to see the difference. The drop is approximately 40%. Clearly, legitimate businesses have found a winning strategy that allows them to stay ahead of the shadowy market.
The legal market tactic
Indeed, a question could be asked immediately: What could possibly attract cannabis consumers to legal retailers? After all, they've become accustomed to their other suppliers. In fact, it's common to hear the saying, "Money talks." Indeed, in the battle between legal and illegal businesses, money is key. Legal shops have simply lowered their prices.
"It is really important to emphasize that price reductions in the main dry flower verticals have been essential for the transition of many of these consumers," says George Smitherman, CEO of the Canadian Cannabis Council, a group of cannabis producers.
Future prospects
Indeed, legal cannabis sales in Canada have certainly surpassed those on the black market. To maintain this momentum, concrete actions are crucial. In this regard, proposals have been made, notably concerning a federal excise tax. Along these lines, Smitherman hopes the government will thoroughly examine its various applications within the production chain. He further states...
"Imagine the progress we could make if the government examined how its policies might be hindering further progress in eliminating the illicit sector.".
Still with the aim of developing the legitimate sector, he continues his argument.
"To move forward, we need to broaden the options for consumers: more retail outlets, for example, but we also need to be mindful of the final product price. We're doing a lot of work with the government to make them aware of some of the constraints that current policies entail."
Furthermore, some are also considering relaxing laws on advertising in public spaces.
Editor-in-Chief specializing in CBD
Julien, born on July 17, 1978, in the Paris region, is a prominent writer and expert in the field of CBD products. Following his studies, Julien developed a passion for natural remedies, including CBD. In 2022, he joined the CBD.fr team as an expert and regular contributor. Thanks to his scientific expertise and clear writing style, Julien helps demystify the complexities of CBD, while highlighting its benefits and potential applications through his articles and conference presentations.
