With cannabis legalization on the horizon, black market's future is hazy

The locations of Edmonton's proposed legal pot shops could make or break the black market, a University of Alberta researcher says.

Edmonton experts divided, but one legal grower says illegal weed is here to stay

A U of A researcher says lack of access to legal pot shops could keep the black market booming. (Paul Palmeter/CBC)

The locations of Edmonton's proposed legal pot shops could make or break the black market for cannabis, a University of Alberta researcher says.

Most of the proposed legal cannabis stores are situated in central parts of the city like downtown and Whyte Avenue. Grad student Thomas Lippiatt says this means cannabis consumers in the suburbs and outskirts of Edmonton might instead rely on the convenience of the black market.

"Accessibility is likely to be a problem with the legal market, which, a reasonable person can assume, will create challenges for its ability to displace that black market," said Lippiatt, who is studying urban planning. 

Wondering how the city's land-use policies might constrain the legal cannabis market, Lippiatt mapped it out.

He used a map of existing pharmacies in the city as a proxy for dispensaries, since they also sell controlled products. He then marked the land eligible for dispensaries.

Pot shops will have to be at least 200 metres apart from each other. They will not be allowed near schools or parks. 

The resulting map shows a sort of cannabis desert in the southwest and southeast parts of the city.

Lippiatt said that since not everyone will feel comfortable being seen in a cannabis store, residents in these areas might be tempted to just stick with their black-market dealers.

'We'll continue to enforce laws around cannabis'

Police are still keeping an eye on the illicit marijuana trade.

The Edmonton Police Service has been preparing for legalization for more than two years, said Insp. Shane Perka, head of the organized crime branch.

Buying and selling black-market cannabis is still illegal. Since legislation to legalize the drug hasn't yet passed, new laws and penalties surrounding possession and purchasing of black-market marijuana are unclear.

"We're not quite sure what the new laws are going to look like," Perka said. 

"For us, it's a matter of prioritization. Having said that, we won't turn a blind eye to enforcement or intelligence opportunities with respect to black-market cannabis. Where we see fit, we'll continue to enforce laws around cannabis."

For us, it's a matter of prioritization. Having said that, we won't turn a blind eye to enforcement or intelligence opportunities with respect to black-market cannabis.- Insp. Shane Perka, Edmonton Police Service

For now, EPS members are undergoing training on new legislation. Perka anticipates issues to arise around edibles and clandestine labs. Edibles will not be immediately available in legal pot shops, and households will be allowed to grow up to four cannabis plants, according to the Alberta Gaming, Liquor and Cannabis Commission.

"Inevitably, there's going to be some households that interpret that to mean 14 or 40," Perka said. "And what do we do when we come across those kinds of scenes just in normal policing and responding to different types of calls for service?"

Tom Neumann, a legal home grower who lives just outside of Edmonton, is confident the black market isn't going anywhere soon.

Consumers care about the relationship they develop with their supplier, he said, and he expects there will be a demand for home growers looking to learn how to properly tend to their own plants. 

He says producing his own cannabis costs less than 60 cents a gram.

"People are going to grow their own because the prices are going to be too high," Neumann said. "Why am I going to go to the government to give them more money ... and I don't even have a relationship with them?

"The black market, I believe, is going to be successful for sure. It's going to take a lot more than they think to change it."

Black market won't survive, retail expert says

But one retail expert says the black market will go the way of moonshine — it will disappear eventually.

Kyle Murray, vice dean of the Alberta School of Business, says buying black market marijuana just isn't worth the risk.

Consumers might initially be concerned about the stigma of being seen in a cannabis shop, or of paying for legal cannabis with a credit card and creating a record of purchase, Murray said. Consumers had similar concerns with the advent of online shopping, he added.

But the pros outweigh the cons, Murray says. He argues there is no quality control with black market marijuana, no record of where the profits end up and whether it funds other illegal activities, and consumers put themselves and their dealers at risk of arrest or fines.

It's an unnecessary worry when you can order online or buy from one of the province's legal stores in what Murray says will be the best regulatory framework in Canada. 

"I don't think the black market can really survive against a legal, well-operated market for cannabis, which is what we expect to unroll," he said. 

"Ten years from now, unless things go horribly wrong, we won't be having discussions about the black market anymore."


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