Demand for illegal cannabis still high, 1 year after legalization

One year after the federal government legalized recreational marijuana, 60 per cent of Canadians are still buying the drug on the black market or from sources that are not entirely legal, according to Statistics Canada data.

The Liberal government's main argument for legalization was a push to take the drug out of the hands of children and the profits out of those of criminals.

And although the percentage of illegal sales has steadily been going down since Oct. 17 of last year, the black market today remains a $4-billion-a-year industry, according to numbers from Statistics Canada.

Those illegal sales can take many shapes.

Jay LeBourque opened a lounge the day after legalization. In exchange for buying a sticker, at a price that can range anywhere from $3 to $30, he offers his clients cannabis — it's a gift, he says. That's how he tries to get around the law.

"I'm pushing it, yeah," said LeBourque, who owns and operates Touch of Grey in Moncton.

"Because I do not agree with it."

LeBourque said he feels the government-operated stores are failing to deliver a strong product at a competitive price. 

Cannabis NB is currently the only authorized retailer of recreational cannabis in the province, and consumers have complained of high prices.

LeBourque doesn't grow his own cannabis, and he admitted to buying it from someone who harvests it illegally. 

"I'm allowed to give the whole country 30 grams a day," he said. "I'm in a grey zone."

What's clear is the demand for illegal cannabis hasn't vanished overnight.

In the second quarter of 2019, Statistics Canada estimates Canadians spent $918 million on illegal cannabis. That's compared to $443 million for legal recreational cannabis during the same period, and $150 million for medicinal products.

Government 'naive'

Those numbers don't shock Rodney Wilson, director of the New Brunswick Craft Cannabis Association.

"The black market was a low production cost cottage industry slash side hustle that had strong customer relationships, that were supported by a multi-level distribution network that had been developed over decades," said Wilson.

"And for the government to think that by just passing some laws and regulations, that such a formidable and ubiquitous competitor, you could take market shares from them, was naive." 

Wilson is applying for a licence from Health Canada. He's building a nursery to house 4,000 plants by next summer and wants to be a craft cannabis grower.

He's doing business with three "legacy growers" — people who were growing cannabis before it became legal — and Slim Hippie Farms is providing the space.

To get the small grow room up to code, it costs $500,000. And that's just to grow the plant. Someone else will harvest his crop. 

Though he has chosen the legal route, he said many don't have the money.

"They just cannot afford to comply with the red tape," he said. "The cost to comply with that is astronomical."