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Canada’s Refusal To Let Weed Dealers Enter The Legal Market May Be Fueling The Black Market

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Canada’s decision to bar illicit cannabis dealers from entering the legal market may be hindering the effectiveness of legalization, according to Dan Malleck, an expert in drug and alcohol regulation from Brock University. Malleck says that on top of heaping inventory to sell when cannabis legalization came into effect on October 17, 2018, Canada’s provinces and territories should have also brought illegal growers and dealers into the legal market. 

They should have not just stockpiled [cannabis],” Malleck told The Washington Post. They should have created a mechanism that allowed illegal producers to move quickly into the legal producing system.”

The illicit producers and suppliers agree, according to David — a dealer from Montréal who didn’t reveal his last name for obvious reasons. David says that he and other members of the black market were surprised that neither the federal nor provincial governments brought them into the legal fold.

All of us thought, Okay…I’m going to be able to come out of the shadows and I’m going to be able to pay taxes,’ ” David told The Washington Post. As time went on, it became clear that’s not what [lawmakers] were after.”

In most provinces and territories, all sales of cannabis are handled by stores that are owned and operated by provincial and territorial governments. And even in provinces like Alberta and Ontario, which allow private retailers, there are financial barriers preventing members of the black market from transition into the legal market. The application fee for a license to sell cannabis can reach C$5,000 and annual licensing costs can hit almost C$25,000. And even if you can afford to pay those prices, you might not pass each province’s security checks.

Canada’s approach is also much different than what we’ve seen in America, where most legal states have developed a way for illicit retailers to transition into the regulated market, according to Lewis Koski — former director of the Colorado Marijuana Enforcement Division.

I can’t think of a state here in the US that has a government-control model similar to…Canada’s,” Koski said.

Canada took a different approach in order to keep organized crime out of the legal market. But experts say that approach was outdated since most criminal organizations that were involved in illicit cannabis sales“pretty much pulled out a long time ago,” according to Rob Gordon — a criminologist at Simon Fraser University in Vancouver. He says that once cannabis legalization began to spread along the US west coast, organized crime backed off. 

David also says that most people selling cannabis illegally in Montréal are doing it to support themselves, not criminal syndicates. He says it’s a way to make a living out of something you love.

They’re kind of, like, weed nerds,” he said, creative types, musicians, artists, people like that.” And given the rampant supply shortages that Canada has faced in the early months of legalization, David thinks his business will thrive for some time. 

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