Cannabis edibles expected to take small bite out of illegal sales
Police and industry analysts say consumers still attracted to black market’s lower prices
Licensed cannabis producers are optimistic that the introduction of legal edibles will help displace the black market, but analysts say it will take time to displace illegal sales.
Edmonton-based cannabis producer Aurora is launching a line of edibles that include chocolates, gummies and vaping products.
The company has submitted its products to Health Canada for approval and could begin selling them as of mid-December.
Canadians are purchasing edibles from the black market because they're interested in alternative ways of getting high, said Aurora chief corporate officer Cam Battley.
He thinks many of those consumers will migrate to the legal market in search of safer products that are properly dosed.
"This will give the legal industry the real opportunity to make significant strides in replacing black market sales with attractive and safe adult consumer products," Battley said.
"There is a willingness to pay for products that are deemed to be properly regulated."
Cannabis industry analyst Andrew Udell, CEO of the popular blog The Cannalysts, cautions that it will take time to make that shift.
Unregulated cannabis remains appealing because of its lower cost, he said.
While legal cannabis production is inexpensive, regulations and taxes drive up prices for consumers and governments need to strike the right balance, Udell said.
"Try and find the right price at the right size for how much goods or products should cost, versus societal goals of, say, public health and reducing social costs of consumption."
Just 29 per cent of cannabis users say they get all of their product from legal sources, according to Statistics Canada.
But the fact that Alberta has more than 300 cannabis stores may give the province an advantage in fighting illegal sales, Udell said.
"Convenience, price and selection within a regulated framework, all three of those things will ensure the adoption, expansion, growth and sustainability of legal cannabis consumption."
Edmonton police officers are dealing with a proliferation of illegal online stores in the year since legalization, said Const. Dexx Williams.
"There's more of them now because the demand has been so great and the legal supply, especially at the beginning, was really struggling to keep up."
Consumers might place orders thinking the sites are legitimate, he said, but the products are potentially dangerous.
"By purchasing products that haven't met Health Canada standards, people are opening themselves up to utilizing products that might have contamination," said Williams.
He thinks consumer behaviour will change over time as the legal market becomes more entrenched.
"We're talking generational change, societal attitude, and also supply, price and convenience," Williams said.
"A whole bunch of things will come together and then you'll see a natural evolution of transitioning to the legal market from the black market until the black market is obsolete."