Trudeau’s Troubles Increase

The big-money competition is among cannabis producers.
The big-money competition is among cannabis producers.
The Oct. 17 launch of legal recreational cannabis in Canada brings many challenges. Retailers are now worrying about possible product shortages or web site glitches. Governments are still debating how to handle amnesties, impaired driving, and workplace safety

But legalization day also marks the start of several interesting competitions. Some resemble those in other industries; others are unique to .

The most important one from a public policy perspective is the competition between legal cannabis and black markets. Squeezing-out illegal suppliers is a key legalization goal.

The black market’s head start

As I’ve noted before, it’ll be tough to lure customers away from established illegal vendors. For one thing, cannabis-infused foods and drinks aren’t yet legal. Black markets will monopolize those products for another year.

Dried cannabis and oils are legal now but may experience shortages. But those should disappear next year as more growers become operational.

Places to legally shop are also scarce in most provinces. Québec only has 12 stores open and Ontario won’t have any brick-and-mortar stores until spring. By contrast, Alberta has a hundred stores opening this month. As store counts grow, legal cannabis will grab more market share.

Pricing also handicaps legal vendors. They must pay fees and taxes while competing with street prices around $7.20 per gram.

However, legal cannabis might eventually undercut illegal weed. Mass production is already reducing per-gram growing costs below $0.75 and is heading for $0.20. Moving production to countries with lower wages and warmer climates could drop that to $0.05.

[Read It All]

See Also:

(1) Shares of most pot companies sell off on 1st day of legalization

(2) We Fearlessly Investigate, Expose, Challenge, and Hold the Marijuana Industry Accountable.

(3) A ‘dark day for Canada,’ say anti-pot activists

(4) Conservative majority if federal election held today: Poll

(5) A few hours in and Canada has officially gone to pot

(6) Tories devote their entire share of question period to grilling Trudeau over Mark Norman case

(7) Why the Liberals’ single-minded obsession on free trade with China?

(8) What legal weed in Canada means for science

(9) ‘She’s way out of her league’: Steel exec slams Freeland’s handling of tariff fight

(10) White House official called Trudeau ‘that little punk kid running Canada’

(Visited 61 times, 8 visits today)