It might seem the best way to protect Canadians from the evils of marijuana is to restrict supply and discourage advertising.
But new research indicates such an intuitive approach may actually have the opposite effect, including making the drug more accessible to kids and diverting supply from people who need it to treat pain or seizures.
Instead, based on evidence expected to be published this year, the best thing the government can do is increase supply and keep prices low.
“At the federal level, supply should be their main concern,” says economist and policy analyst Rosalie Wyonch, who helped assemble the new data.
While Canada’s legal cannabis industry insists it is on track to squeeze out the black market, research from the C.D.Howe Institute, the Canadian think-tank where Wyonch works, contradicts that claim.The clear economic logic is that so long as there is demand beyond what the legal industry can supply when new legislation takes effect this year, a market supplied by criminals will continue to exist.
Evidence from places where weed has already been legalized shows the black market sector has actually boomed following a change in the law.
In the Canadian case, the C.D. Howe investigation indicates that immediately after recreational sales are permitted, illegal suppliers will continue to control about half the market, wiping out roughly $420 million in potential excise tax revenue that would otherwise be collected.