You Get What You Pay For

Nicholas looks into the issues that occur in the regulated market which will serve as a blueprint for what we need to avoid down the road when Ireland joins the discussion of cannabis reform.

As we gradually move towards the legalisation of cannabis, we must acknowledge such regulation would incur several differences not normally experienced in the black market.  While the obvious will be the restriction of sale to anyone under the state-appointed age, patrons will also have the ability to choose the strain and strength of the weed they’re purchasing from a safe and reliable source.  The reality is the cost that many smokers in this country currently have to pay will change drastically, which many fear will be for the worst.

In the series of interviews Richard has carried out since the inception of this blog, the primary response from interviewees regarding the safety of purchasing from the black market is universally negative.  The worst experiences coming from women who fear for their welfare whenever purchasing cannabis on the streets.  Currently, smokers have to do business with drug dealers who package cannabis in Ziplock bags, storing them under kitchen counters or garden sheds for the sale to anyone of any age.  In most cases, the marijuana isn’t even cured before it’s put on the market, making for a weak and less cost-effective purchase.   

It’s time to take cannabis out of the hands of the black market and put it in the safe, accessible, and reliable hands of specialists who can aid the customer in the type of strain and strength of the cannabis they’re buying.  The questions we must ask ourselves are, are we willing to spend more for the safety that comes with a regulated market?  Will we continue to feed the black market for our individual benefit in the wake of a legalised environment?  I fear this will be the case, as seen since the pandemic, people are prone to selfish acts in a very Irish cultural mentality of “but what do I get out of it?”.

This has become a topic of discussion going forward since Canada legalised cannabis in October 2018.  An area of concern has occurred, where the black market, which hasn’t suffered in sales since dispensaries opened, has left many to question what has brought this on.  The closing of legal cultivation greenhouses by Canopy Growth, the biggest firm in the cannabis sector, has come about due to the loss of revenue to the black market as the recreational market has “developed slower than anticipated”.  The consensus on this issue is the fact that the legal market is struggling to draw people to their products due to the higher cost and lower strength the market has on offer. 

This issue is a result of the Canadian government fumbling the landscape of selling cannabis as the government doesn’t advertise the type of cannabis you’re buying, leaving the customer more uninformed than those buying in the black market.  The quality and timeframe in accessing the drug has also left a lot to be desired.  The legal price of cannabis is driven up by taxes and those in power of regulating it have also aided in the problem by restricting suppliers from developing brands.  The strict rules around advertising cannabis have left the legal market with very little brand identity leading to little confidence in a purchase for the customer.  This is compounded by companies that struggle to open stores due to the protests of local authorities that don’t want cannabis sold in their communities. 

The issues seen in Canada are a result of a market that got ahead of itself and created a bubble by “drinking their own Kool-Aid” as said by Anthony Dutton, a co-founder and former Chief Executive of Cannex – a US-focused marijuana firm that is listed in Canada. 

“So, what we’re seeing now, thankfully, is a lot of the companies that probably should never have been financed – and probably should never have gone public in the first place – are slowly withering on the vine and they’ll just disappear.  Now there will be a consolidation around half a dozen strong operating companies, including 4Front, and those will be the companies that will take it into the next cycle. It’s just like in the dotcom boom. Oracle, Microsoft, and other big companies were all around then, and they were profitable. And when the little companies began to fail, Microsoft and Oracle and the others picked up the ones they wanted, and the others they just let die.” – Anthony Dutton [1]

Then there is of course the grey market which can be seen in California, as the red tape of acquiring a licence to sell has put off companies from following the stringent rules the regulated market enforces.  This has resulted in another competitor for the legal market due to companies refusing to abide by the intricate regulations that encompass everything about the procurement and selling of cannabis. From security to product testing, the grey market can undersell their law-abiding competitors by up to 50% as noted by Bryce Berryessa, the president of the licensed California cannabis company La Vida Verde.[2] 

Unlike the black market, the grey market operates in plain sight and doesn’t advertise to customers whether the store is legal or not.  However, like the black market, the grey market stocks counterfeit products that imitate known legal brands.  There have been measures to combat unlicensed dispensaries in the form of guard troops deployed into northern California’s cannabis cultivation regions to crack down on the grey market but still, it isn’t enough. [3]

As cannabis legislation is in its infant stages, it will be some time before legalisation becomes more widespread and corporatised, eventually causing the black and grey markets to wane, though many legal businesses won’t last before this happens.  Weed shortages are a big proprietor to the black market flourishing, as the lack of availability forces people to find different sources.  The shortages also cause the legal market to increase prices further, leading to cynicism about purchasing legally.  This is also seen in Illinois, where illegal sales of marijuana are expected to outpace legal sales at least through 2024, according to data from cannabis industry research firm BDS Analytics.[4]

These problems and the solutions we will come to see in future years should be the blueprint for how we approach cannabis legislation in this country.  The strength and availability of cannabis should be considered as to not make the same mistakes seen in Canada.  Limiting smokers to specific strains, while charging twice what is standard in the black market is a pothole that can be easily avoided by acknowledging what is happening now, so it doesn’t have to occur here in the future.  Obviously, this is easier said than done. We can only assume how the government will take on such an ambitious venture – whether Ireland will grow its own supply, or similar to our fishing industries, will we sell our new-found potential to a neighbouring country, allowing them to profit from an industry we can seize for ourselves?  Only time will tell.


References:

[1] https://www.theguardian.com/society/2020/mar/18/cannabis-canada-legal-recreational-business

[2] https://www.record-bee.com/2018/12/01/legalizing-marijuana-was-supposed-to-slow-illegal-activity-in-california-it-hasnt/

[3] https://www.theguardian.com/society/2019/mar/17/legal-weed-black-market-california-gavin-newsom

[4] https://wgme.com/news/marijuana-in-maine/it-may-be-legal-but-high-prices-inconvenience-may-drive-black-market-marijuana-for-years


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.