Black market will thrive if Alberta government runs marijuana stores, says mid-level dealer – Calgary

The black market will continue in Alberta if the province goes with a government-run sales model for recreational marijuana when it’s legalized next year, predicts a mid-level dealer who has been selling dope in Calgary for nearly 20 years.

“If it goes Ontario’s model, I become richer,” said the dealer, who spoke to CBC Calgary News on the condition of anonymity.

“If they do private, they have a chance to compete.”

The dealer says he got started about 20 years ago, selling to friends and classmates as a way to fund his own supply. He says he began treating it like a business about seven years ago and now averages about 150 kilograms in sales annually. 

Legislation introduced by the federal government aims to legalize marijuana in Canada by July 2018.

The province of Ontario’s framework for recreational marijuana received criticism when it was announced in early September. The plan will see cannabis sold in just 80 government-run stores across the entire province to start, which will be expanded to 150 stores by 2020.

The minimum age to buy and consume there will be 19. 

Mike Schreiner, leader of the Green Party of Ontario, said in a statement that having limited retail outlets “will do virtually nothing to combat the huge illegal market.”

Several prominent cannabis activists were also critical of the plan, including Eric Nash and Wendy Little, two Canadian cannabis industry consultants who tweeted their concern about the lack of cannabis stores being opened by the province.

Pot will also be available online in Ontario, but deliveries will require a signature and proof of age.

By comparison, Alberta’s draft framework was unveiled by Justice Minister Kathleen Ganley last week. It calls for:

  • A minimum age of 18 to buy or consume marijuana.
  • Public possession limit of 30 grams (with no limit on possession in private residences).
  • Allowing up to four plants to be grown per household, up to one metre high.
  • A ban on smoking and vaping marijuana in vehicles, even for passengers.
  • No online sales.

The Alberta Gaming and Liquor Commission will serve as the central wholesaler for all products, but Ganley said the province has not yet decided whether stores will be privately run or operated by government — and that decision will affect what happens to the black market, says the dealer.

“In my opinion… if you have a free market, the government not controlling it and [businesses] battling it out, you will have better prices, 100 per cent,” the dealer said.

“Better prices, better innovation. That’s the only way.”

Calgary marijuana dealer

A mid-level marijuana dealer holds about a kilogram of marijuana packaged for sale. (Dave Dormer/CBC)

Another unanswered question is whether products like marijuana oils and edibles will be available for recreational sales. 

The NDP government is calling for feedback on the draft rules until Oct. 27. Legislation will then be presented by the end of the year, including whether to use a public or private model.

Negotiations between the provinces and federal government around taxation — which will play a factor in the final price — likely won’t be finished by then, said a Ganley spokesperson.

The federal government has proposed a 50-50 split of tax revenues, which Ganley has said won’t work. Since it’s the province that will be covering a majority of the cost to set up and run the system, she argued, it should be the province getting a majority of the tax revenues.

Ganley has also said she doesn’t think initial revenues will be enough to cover the start-up costs.

Ontario officials have indicated they’ll be aiming for a price of $10 a gram, but that may be too high, figures the dealer, who said he charges between $6 and $8 a gram.

“If they’re looking at $10 or $11 grams in nondescript packaging that only [is sold during] the hours of the LCBO, they’re going to get destroyed,” he said.

“[The black market] is going to be half the price of what they can do it. That’s what the government is not understanding … these [dealers] are ahead already, they have better product and clientele and people that are knowledgeable.”

The U.S. experience

Taxes on marijuana in Washington State totaled 75 per cent when it was first legalized in 2014, and coupled with supply issues, drove the price up to nearly $25 US a gram, which allowed the black market to thrive.

The tax rate has since been adjusted to 37 per cent and the price has dropped to around $6 US a gram, curtailing illegal sales.

In Colorado there’s a 15 per cent excise tax on marijuana, along with a sales tax of 15 per cent (which was raised from 10 per cent earlier this year) and a state tax of 2.9 per cent, for a total of 32.9 per cent.

The average price of recreational marijuana in Colorado is about $6 US a gram.

That seems to be striking the right balance, says Lewis Koski, who was director of the marijuana enforcement division for the state of Colorado when it was legalized. He’s now a lecturer at University of Colorado Denver and co-founder of a consulting company that helps local and state governments with policy implementation.

Lewis Koski, former director of the marijuana enforcement division for the state of Colorado

Lewis Koski is the former director of the Colorado marijuana enforcement division and says pricing there has largely eliminated black market sales. (Submitted/Lewis Koski)

The evidence of that balance, says Koski, is the fact a large majority of sales have moved from the black market to legitimate stores.

“We did a demand study and found the total demand for the entire state was around 131 to 133 metric tons,” he said.

“We estimated in there what part was medical and what part was going to be serviced by the commercialized, licenced and medical retailers and what part was going to be done by the black market still.

“What’s interesting is, in the year since that study was published, the regulated market, between medical and retail, the licenced businesses, they’re on track to produce that much or more, so what that tells us is … to a large extent the regulated market is probably meeting the local demand.”

The price of marijuana also continues to fall in U.S. states where it’s now legal. According to numbers released by the state of Colorado, the price of marijuana there has dropped from about $2,000 US a pound in January 2015 to about $1,300 US a pound today.

And total revenues from marijuana taxes, licences and fees in Colorado were more than $158 million up to the end of August this year, according to numbers released online, which are the most recent statistics available.

Prices are similar in Canada, says the dealer, sitting between $1,300 and $1,500 a pound, but that’s in Canadian funds.

Black market still exists

The black market still exists in U.S. states where marijuana is legal, but it has morphed somewhat from street-level sales to wholesale distribution to neighbouring states where it remains illegal, says Koski.

That could happen in Canada too.

Calgary marijuana package

Marijuana packaged for sale in Calgary. (Dave Dormer/CBC)

“If there are a number of U.S. states that have a demand for marijuana, there’s a potential for Canadian marijuana to be diverted,” he said.

“If the black market is changing their business patterns because they’re disrupted by the regulated marketplace, they may be interested in moving it to other areas where it’s illegal. The black market is less likely to pay attention to the boundaries between countries.”

Source link

CBC News Canada

CBC News Canada

CBC News Canada is Canada's Online Information Source. Comprehensive web site for news, entertainment, sports, business, and a complete guide to CBC-TV, CBC Radio and CBC News Network
Buds2Go.ca is not responsible for, nor do we always share the opinions of the content posted on our website through our partners or independent authors.

Leave a Reply

What is a Sativa?

Sativa strains of medicinal marijuana are usually uplifting and stimulating. If you’ve ever smoked or ingested cannabis that makes everything funny and puts you in a great mood, it was probably from a Sativa strain. It creates a feeling of comfort, non-drowsy, and usually introspective highs. The effects of smoking or ingesting a Sativa makes them particularly popular among artists and creatives. The most popular medicinal benefits range from treating mental and behavioral problems, to treating depression, stress and ADHD.

What is an Indica?

The major difference between Sativa’s and Indica’s is while a Sativa can make you feel alert, active, and aware, an Indica will have a relaxing feel on the body. The physical effects of an Indica strain commonly include a drowsy and mellow mood with stress and pain relief. Indica’s are one of the more suggested strains when using it for medicinal purposes as it effectively treats sleeping disorders such as insomnia, fibromyalgia, body aches and pains. Indica’s are also commonly used for treating Multiple Sclerosis, Parkinson’s disease, Fibromyalgia and Lupus

Why Choose Hybrid?

The benefits to smoking or ingesting a Hybrid strain are simply as follows. Hybrid’s offer the best of both worlds combining several qualities of each containing strain. Some Hybrid’s are Indica dominant, which will offer pain relief and / or mellow mood, however may contain up to 50% Sativa so it will not make you too drowsy. Other’s may offer a Sativa dominant strain, which will encompass several calming benefits and pain relief, but also give a mellow, yet energetic high.

Why use Buds2Go?

We offer a guaranteed, reliable medicinal marijuana buying and shipping experience for our members. There are still thousands of people who don’t live in areas that are served by local dispensaries such as Vancouver and Victoria BC. We offer mail order marijuana in canada that is both fast and discreet and always include tracking numbers. Mail Order Medical Marijuana - Medicinal Cannabis Dispensary - Buy Weed Online