Will more legal pot stores snuff out the black market? Probably not, heavy users say

The Ontario Chamber of Commerce says people in this province are open to a bigger role for private industry in providing convenient access to cannabis. But not all are convinced it will lure long-time users away from their dealers.

Ontario Chamber of Commerce suggests more private stores will increase convenience

Abi Roach, owner of the Hotbox Cafe, says for convenience, quality and price, no legal source of cannabis can compete with her regular drug dealer. (Katie Nicholson/CBC)

It's a basic tenet of retailing: if you want to reach more customers, you need more locations. And according to the Ontario Chamber of Commerce, that principle applies to pot just as much any other product. 

The chamber says people in this province are open to allowing a bigger role for private industry in providing convenient access to cannabis, if it helps get rid of the black market — pointing to a Nanos survey conducted online at the end of October.

The poll, released Thursday, suggests 51 per cent of Ontarians would favour allowing private-sector companies to purchase, distribute and sell cannabis, with the province's oversight. But not everyone's convinced it will get rid of the illegal market, especially heavy smokers like Abi Roach. 

"On product quality, price and convenience, right now, my drug dealer wins on all those things," said Roach, who is the owner/operator of the Hotbox Cafe — a spot in Toronto's Kensington Market where you can spark up a joint with your meal, even though you can't buy cannabis there.

"He has a quality product at a much cheaper price and a much more convenient manner. And he's authentic. I like him, I connect with him and I know him personally," she told CBC Toronto. 

And she says allowing the cannabis industry to have more involvement won't change that.

'It's not their jam'

"These stores are very much geared towards, you know, the soccer mom. They'll smoke a joint at a party, whereas the real consumer, the people who are still using the unregulated market, it's not their jam. It's just not the kind of atmosphere that they're looking for."

But according to Daniel Safayeni, director of policy for the Ontario Chamber of Commerce and co-chair of the newly formed Ontario Cannabis Policy Council, easier access to legal weed could eventually get users like Roach to go legal.

"Ontarians are looking for increased convenience to be able to purchase from legal entities and legal means," said Safayeni, adding that Ontario's 25 brick-and-mortar shops for 14.6 million people aren't nearly enough to present a viable option to the illicit or unregulated market, although 50 more stores were slated to begin opening in the province last month.

"We're unfortunately not going to be able to do that with limited retail presence and we're not going to be able to do that in the absence of an efficient retail market that can compete with the illegal markets," said Safayeni.

In comparison, Alberta has 301 stores for a population of just over four million.

Daniel Safayeni, director of policy for the Ontario Chamber of Commerce and co-chair of the newly formed Ontario Cannabis Policy Council, says a recent public opinion survey suggests 51 per cent of Ontarians would like private sector companies to have a larger role in selling cannabis. (supplied)

As seen in other provinces, Safayeni says access and convenience is improved when the private sector plays a greater role in the purchasing, distribution and retailing of cannabis.

Jay Rosenthal, co-founder and president of Business of Cannabis, which conducts research and hosts events on everything to do with weed, says convenience and access are key factors for many potential new consumers.

"It's really a challenge in Ontario that it's not convenient to buy [legal cannabis] unless you happen to be within walking distance of Queen Street West in Toronto," he said.

Rosenthal says the Ontario government has been criticized pretty heavily in the year since adult recreational use became legal and it recognizes that to bring people into the regulated market, more retail options are needed.

The province announced it is considering a click-and-collect system that would allow consumers to buy products online and then pick them up at a government store. Also, licensed producers could be allowed to sell to the public directly at their main production sites.

Jay Rosenthal, co-founder and president of the Business of Cannabis, says convenience and access are key factors for many potential new consumers, but longer term users who consume the most cannabis still have access to alternative sources. (supplied)

But Rosenthal says those who have been consuming cannabis longer have priorities other than simple convenience.

"It's not as if their source for cannabis closed down on October 17th, 2018. They still have that source. They may buy from the legal shop or they may buy from their source," he said, adding it's a minority of cannabis users who consume a majority of the cannabis.

And when it comes to those regular users, Rosenthal agrees with Roach: quality, price and convenience really matter.

For her part, Roach would like to see more small operators like her get a chance at transitioning to the legal market.

"We have to turn away 200 people a day and send them down the street because we can't sell cannabis," she said, adding that she's not thrilled with the lottery system the province used to license the new stores.

"And the fact that I have to send those customers to a lottery winner who put $75 into a hat and then sold that licence for $15 million to some large corporation makes me want to vomit."


Philip Lee-Shanok

Senior Reporter, CBC National News

From small town Ontario to Washington D.C., Philip has covered stories big and small. An award-winning reporter with three decades of experience in Ontario and Alberta, he's now a Senior Reporter for the National Network based in Toronto. His stories are on CBC Radio's World Report, World This Hour, World at Six and The World This Weekend as well as CBC TV's The National and CBC News Online. Follow him on Twitter @CBCPLS.