Black-market pot business thrives a year after cannabis legalization
Greg says his black-market pot delivery business only really took off after legalization a year ago.
“We’re just growing and growing and growing,” said the Calgarian, who won’t give his last name.
“It’s made it easier for us.”
Since last October, the demand for his product — which he said also services a considerable medicinal clientele — has required an increase in his staff from four to nearly 20.
The key to that success, said Greg, is running the web-based service like a legal one and supplying superior pot at a lower price.
“We check customers’ identification, we offer points, we bring it to your door … why would I pay that higher price for a crappy product?” he said.
His outfit has even spun some of that good fortune into providing a low-income, disabled Calgarian with a year’s worth of medicinal cannabis products for free.
Another illicit, more casual supplier said his sales are down 10 per cent since last fall.
“(There’s been) very little change, and they’re the ones who would buy a quarter ounce every couple of months,” said the man, who also requested anonymity.
“The regulars still prefer the quality and potency of B.C. bud.”
Estimates vary on how many of Canada’s cannabis users are consuming illegal pot, but some, including one provided by the federal government, run to more than 50 per cent.
Much of that is driven by black market prices that can be half of what the legal sector demands.
Some in the legal side of the business, such as former retailer Jeff Mooij, say more emphasis on quality is needed.
“I’m looking more at the micro-growers. It’s an opportunity for people to show their skills and it’s got what’s lacking right now — quality,” he said.
Months of a legal pot shortage sent customers back to their previous dealers, said Jamie Burns, CEO of Alcanna, which operates Nova Cannabis stores.
And he said taxes, steep overhead and a raft of mostly federal regulations — including those governing packaging and tight restrictions on advertising — make it tough to compete with cannabis outlaws.
“A big reason given by the feds for legalization was to destroy the black market, but the rules they put in place are extremely contradictory,” said Burns, whose stores offer a so-called weekly black market-buster discount.
An executive with Alberta Gaming, Liquor and Cannabis (AGLC) said he’s confident law enforcement will begin cracking down on online black marketers.
“There have been a number of discussions on how to displace the illicit market,” said Dave Berry, AGLC vice-president of regulatory services.
“In Alberta, over time, there will be an increased effort to combat the illicit market.”
But at the same time, he said there are limits to law enforcement resources, which were echoed by Calgary police.
“Investigations involving online sales of illicit substances are resource-intensive, time-consuming and often involve multiple jurisdictions,” Calgary police said in a statement.
“Currently, our limited resources for drug investigations are focusing on the substances that are causing the most harm in our community: opioids and methamphetamines.”
Since legalization of recreational pot, Calgary police have shut down five illegal growing operations resulting in 19 charges.
Other cannabis seizures were down 85 per cent between the spring of 2018 and the same time this year, and were mostly part of arrests involving other drugs and crimes.
Alberta Justice and Solicitor General referred questions about cannabis enforcement to Calgary police.