Article by Mark Young, Wikileaf
When Canadian Prime Minister Justin Trudeau announced that cannabis would be legal in Canada, the global marijuana movement got one of its biggest push yet.
Canada is the second country, after Uruguay, and the first G8 nation in the world to legalize the plant. Canada stands as the first real test of how national marijuana legalization will play out in the modern world.
Now, half a year after sales were legalized in January, Canada stands to make around $5 billion by 2021 from the industry.
So why is the rollout being considered a letdown?
Lack Of Public Consensus on Cannabis
The first signs of trouble for the marijuana industry in Canada came when the realities of marijuana legalization began to manifest itself in their government.
Marijuana, while being legalized, has a considerable stigma attached to it and is still considered dangerous still by a good chunk of the population.
Before the rollout, the Financial Post published that still about half of Canadians were split on how to feel about marijuana. Sure, more people support the drug than people who don’t, but with over 40 percent of Canadian’s people against it, problems are bound to appear.
Even Prime Minister Trudeau, who made legalizing marijuana in his original 2015 campaign a big promise, has stayed away from marijuana with his looming re-election.
When the details of the rollout began to surface, some troubling notes began to pop up.
Competing With The Black Market
At first, Canada was only going to sell cannabis flower and oil to people, while effectively banning edibles and vape pens for the time being. Edibles are expected to be sold by this December after some outcry, but the high cost of the weed itself is a driving force that is keeping people in the black market.
The average cost of a gram of marijuana in Canada is around 9 Canadian dollars, which is around 7 American dollars. On the black market, Canadian marijuana is going for around 5 to 7 dollars, which is pretty cheap considering there will be taxes associated with legal weed.
This difference in price has kept a lot of people on the black market, with illegal weed accounting for more than $5 billion dollars in gains compared to $2 billion on the legal market.
The legal market is overall having difficulty getting off the ground.
Limited Supply Is Killing Dispensaries
With huge demand, dispensaries and medical outlets were given the short end of the stick with the strict government regulations that were put on them. When the day came for shops to open, the limited supply did not last long.
“When I’m sold out, they’re still gonna find a product somewhere,” Trevor Tobin, who operates the High North marijuana store in Labrador told The Guardian. “It’s hard to keep employees behind the counter when they’re not selling any product – and we lose money every day that we don’t have product on the shelf.”