'Vibrant' black market persists as legal pot marks its first full year in Canada

When the Liberal government rolled out its plans to legalize recreational marijuana, it promised to shrink the black market and keep money out of the hands of organized crime. One year later, lawyers, police and industry experts say we’re not there yet.

Cost, location choice to blame, say industry watchers

Most Canadians have been able to smoke legal marijuana since Oct. 17, 2018. (Joe Mahoney/The Canadian Press)

A year after Canada introduced the legal, recreational cannabis market, the "vibrant" black market for marijuana remains a problem, says the Canadian Association of Chiefs of Police.

"We haven't disrupted the black market significantly at this point, but that was to be expected," said Abbotsford Police Chief Mike Serr, who chairs the Canadian Association of Chiefs of Police drug advisory committee.

"If there is a strong, vibrant dark market out there selling illegal drugs, people will go to that and we need to direct them to the legal market."

When the Liberal government legalized recreational marijuana use exactly one year ago, it promised to siphon away the black market's customer base and keep their money out of the hands of organized crime.

But a year later, the government's own figures show that illegal market isn't dead yet.

Given its illegal nature, it's hard to get a handle on the size and value of the black market — but according to Statistics Canada, just 29 per cent of cannabis users say they get all of their product from a legal source.

And four in 10 Canadians told StatsCan they bought at least some of their cannabis from illegal sources, including street dealers, between April and June of this year, according to the agency's most recent figures.

Serr said whoever forms government after Monday's federal election will have to start putting more resources into fighting online sales.

"The public don't know that when they're going online, typically the first three or four sites that will come up online will be illegal sites to purchase cannabis," said Serr. "We're working nationally to try to find some solutions."

Cost, location, supply

Economics professor Michael Armstrong has been studying the cannabis market. He said three factors — cost, location and supply — have kept the black market booming.

"[In] Ontario, we had no stores for six months. Now we've got 25 and we're still waiting for the next 50. That means the legal industry is missing an opportunity to sell product and take a bigger bite out of the black market," he said 

Using crowdsourced data, Statistics Canada reported that a gram of cannabis purchased from government-approved retailers cost $10.23 in the third quarter.

During that same period, the price for a gram of marijuana from an illegal source was about $5.59.

Statistics Canada has urged caution when interpreting its cannabis numbers, since the data are self-submitted.

Until the legal industry matures, the black market will flourish, said Toronto lawyer Daniel Brown.

"People find that the black market is servicing them a lot better than the legal marijuana stores," said Brown, vice-president of the Criminal Lawyers Association.

"You can still on the black market buy a larger variety of marijuana for much cheaper."

'More or less uneventful'

While the black market persists, Serr said other worries about legalization — such as fears of a spike in impaired driving stats — have turned out to be overblown.

"Overall, I think we can say it was more or less uneventful," he said. "The sky didn't fall, as some may have predicted."

Statistics Canada doesn't provide a breakdown of marijuana-related driving offences, making it hard to describe the impact of cannabis legalization on drug-impaired driving.

Kyla Lee, founder of the Canadian Impaired Driving Lawyers Association, has been monitoring the impaired driving caseload and said there hasn't been a marked increase in cannabis-impaired driving since legalization.

Under the new impaired driving law, police can demand a breathalyzer test from any driver pulled over for violating traffic laws or at a check stop.

"When this legislation was introduced, and as we were approaching legalization, I was really critical ... of what the police might do with the new powers that were given to them," she said, adding police have been using those expanded powers "in a very appropriate way."

"I don't see any systemic overuse of their authority when it comes to impaired driving investigations," she added. "And that gives me a lot of comfort as a defence lawyer and as a citizen."


Catharine Tunney is a reporter with CBC's Parliament Hill bureau, where she covers national security and the RCMP. She worked previously for CBC in Nova Scotia. You can reach her at catharine.tunney@cbc.ca

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