Marijuana has been around for thousands of years with research showing it has been used for medical purposes as early as 1500 BC. However, the black market in Canada came about when cannabis was banned. In 1923, Canada added marijuana to the Confidential Restricted List to the Narcotics Drug Acts Amendment Bill. Interestingly, cannabis wasn’t popular in Canada until the early 1960’s.
- Medical: 2000’s
- Black Market: 1930-1960’s
For Canadians, marijuana can only be purchased legally to grow or buy from a licensed producer under Health Canada’s ACMPR program. However, marijuana has been very popular in Canada since the early 1960’s despite being virtually nonexistent before then.
- Medical: Legal
- Black Market: Illegal
As such, the Canadian marijuana black market has been a lucrative trade for many since then. According to a study published by Deloitte, the recreational market could be well over $8 billion.
Estimated Canadian Market Size:
- Medical: $65 million
- Black Market: $8 billion
With legalization set for midway through 2018 (July), experts say the market will fade as the risk will greatly outweigh the benefits. As a matter of fact, the federal government has made it a point to work with licensed producers to ensure pricing is competitive in a bid to disincentivize black market participants.
The rapid growth of registered medical marijuana patients in Canada further goes to show that medical pot (and soon-to-be recreation) is becoming increasingly available through legal channels.
In Canada, producers need be licensed by Health Canada. Producers are granted a license after a lengthy application process and meeting operational, financial and, compliance requirements.
- Medical: above average – superior
- Black Market: low – high
During the growing process, LP’s must adhere to a list of 20 pesticides authorized by Health-Canada and random quality test of soil purity and cannabis quality. In fact, Health Canada is implementing a zero-tolerance regime for dangerous pesticides such as Myclobutanil.
In cases where the LP does not comply with the criteria set by the government, Health-Canada can decide to recall and destroy the tainted cannabis and in some situations revoke the growers’ license. Broken Coast, a licensed producer from Vancouver, BC, recently announced a recall on some of its oil products.
In contrast, street growers have no governing agency guaranteeing quality control over the cannabis. This leads to the unsafe growing environment and sub-par possibly toxic pesticides and fertilizers. In some cases, if a crop does not yield enough cannabis street growers use various methods to weigh it down. Silicon, various liquids and concrete dust to weigh down the cannabis so they can get more money with each crop.
Selection is almost uncomparable when looking at licensed producers compared to black market dealers (with the exception of large dispensaries – more of a grey market anyway).
Licensed producers can carry as many as 16 strains of dried cannabis alone. Each strain is lab tested for molecular composition for ultimate consistency and reliability. On the other hand, black market dealers often carry as little as one or two strains, backed by very little if any strain information.
With street weed, consumers do not necessarily have all the information they need. Deception is common among dealers. Strains are not necessarily labeled properly and the THC content is completely unknown.
Selection Range (dried cannabis):
- Medical: 8-10 strains
- Black Market: 1-5 strains
On the contrary, medical marijuana is controlled and strains, THC content, CBD content are all properly labeled. If a patient needs an indica to sleep or a sativa to clear their head, the LP’s grow a variety of strains for every patient’s need.
Product availability is also quite different between the medical and black markets. Certain medical products are designed to treat extreme symptoms and chronic pains.
Medically, patients can access:
- dried cannabis
- oils and oil capsules
- growing kits (clones and seeds)
On the other hand, the Black Market typically supplies:
- dried cannabis
- Medical: 4-6 products
- Black Market: 1-4 products
The economics behind medical marijuana is also very appealing to the Canadian government. While the distribution of licenses is still limited, it still creates a legal ecosystem for growers, doctors, and patients. Further, creating jobs in what is expected to be one of the fastest growing industries.
Canada seems to have one of the better infrastructures to become a global leader. Not only that, they have an early movers advantage and a flexible government to go along with it.
By removing the (illegal) middleman, patients can have direct access to online shops and home delivery. This removes the often long wait of meeting a dealer and the uneasiness of purchasing from an illegal source.
This gives access to patients living in remote locations or those with severe conditions. In some cases, they could have debilitating arthritis or live in Northern Canada, where illegal sources don’t even exist. As doctors get passed the stigma behind cannabis more and more patients are gaining legal access to cannabis through the ACMPR program.
The creation of multiple licensed producers also creates competition in the field. This benefits the consumer as the producers are constantly trying to innovate the quality of their cannabis and the ways it can get consumed.
Most prefer not to smoke as it irritates their lungs and they do not like smoke. Topical solutions are made available as well as oils for conditions such as arthritis. As the medical sector grows more options will become available for patients.
As our generation progresses, medical marijuana will become more and more integrated within the global medical field. Meanwhile, the recreational market will likely thrive for years to come as well.
Marijuana will likely quickly fade from the black market as the risks will outweigh the benefits as most will turn to recreational and medical outlets. Canadian consumers will benefit the most, as liberalization and competition will drive down prices and encourage innovation and investment.