With higher prices and relatively few locations, Ontario’s first batch of licensed cannabis stores may have a hard time luring customers away from the province’s thriving black market.
Industry experts are warning of those growing pains with just a week to go before Ontario’s first brick-and-mortar pot shops open their doors to the public.
“Cannabis customers are like people who purchase any other good, if they think they can get a cheaper deal, more conveniently, they’re going to go with the illegal seller,” said Rod Elliott, the vice president of Global Public Affairs, which provides consulting services to companies in the cannabis industry.
Ontario awarded 25 cannabis retail licences through a lottery process earlier this year. Twenty-two stores are expected to open across the province in April, including four stores in Toronto.
“I don’t think everyone’s going to transition to the stores just because there’s not going to be enough of them, and the cost of the cannabis is going to be a bit higher,” said Alannah Fricker, founder of the Ryerson University chapter of Canadian Students for Sensible Drug Policy.
After the stores open, Elliott is predicting that Ontario’s “robust illegal market” will continue into the foreseeable future.
Black market customers pay less, buy more
Recent statistics and surveys appear to show some significant advantages of the illicit market over the nascent legal industry.
According to a crowdsourcing project by Statistics Canada, legal cannabis at the end of 2018 cost nearly 50 per cent more than illicit cannabis — $9.70 per gram versus $6.51.