Low-Quality Cannabis Is Driving Illegal Sales in Canada

Where Is the Legal Cannabis Market Going Wrong?

The reason legal cannabis is unappealing to many isn’t down to the cannabis manufacturers, business owners, or dispensary workers. The companies producing and distributing recreational and medical cannabis are doing the best job they can while trying to work within Canadian laws. 

It’s the laws and regulations surrounding the cannabis market that are the main problem. The quality and price of legal cannabis are directly affected by government legislation. Although businesses may set out to offer high-quality weed to the market for a fair price, these regulations get in the way of maintaining quality and profit margins.

Let’s take a look at the main reasons 60% of Canadian cannabis users prefer to stick to their black market dealers.

1. Legal Cannabis Packaging Sucks

One of the main issues with legal cannabis is the packaging it’s sold in. The Canadian government has made it a requirement that all cannabis must be sold in non-discrete packaging. Cannabis must be sold in large plastic containers and not in the small bags we’re used to. 

Distributors must also ensure that no more than 1000 mg of THC is contained inside the packaging. This means you’re likely to find as little as two to three grams of weed in a large container. This places the cannabis in a less-than-ideal environment. The excessive space around the cannabis inside the container dries the flower out.

These packaging requirements force companies to store their cannabis improperly. Improper storage has negative effects on the quality of the product and the way it smokes. It’s not uncommon to find large containers with two grams of bone dry, tasteless cannabis inside. 

When cannabis dries out completely and is left in these conditions, it loses its flavors and aromas. Certain cannabinoids start breaking down, and the flowers start to shed their THC-filled trichomes. These resins then stick to the inside of the large container the flower is stored in. 

The old faithful baggy that cannabis has been sold in for decades on the black market is actually a far better way to distribute the product. The air-tight qualities of a small bag that wraps tightly around the flower prevent the cannabis from drying out. 

Unfortunately, the regulations that the Canadian government has developed prevent dispensaries from selling their cannabis in this way. These regulations ultimately lead to poor-quality cannabis and put people off spending their cash in dispensaries. 

Legal cannabis packaging also causes other problems that push people back to their black market dealers, which leads us on to our next point — price.

2. Legal Cannabis Is Expensive

Legal cannabis in Canada is far more expensive compared to black-market cannabis. In fact, in a dispensary, it’s not uncommon to pay double what the weed is worth on the streets. This is down to a couple of understandable factors, such as taxation and operational business costs. 

However, another factor is the very packaging that makes the bud so unattractive to consumers. The government requires cannabis distributors to sell cannabis in large containers, as you know. There are also dozens of other requirements such as child-resistant packaging, security features, non-discrete printing, and a long list of labeling requirements.

Meeting these requirements racks up the costs for distributors. A lot of the money you spend on a couple of grams in a dispensary is likely going on that expensive packaging. A large child-safe tin is definitely not comparable to a small clear baggy that costs a few cents.

When you combine the costs of packaging with tax rates of 5 to 10% (depending on region) and costs associated with the business, such as rent, employees, and product costs, you can see why the price of legal cannabis is so high. 

When you compare the running costs of a legal cannabis distributor to a street dealer, you can see why black market weed is sold far cheaper. 

3. Legal Cannabis Isn’t Always As Potent

The potency of legal cannabis is something that varies greatly as it does on the black market. However, several consumers in Canada have reported inconsistencies in potency and sub-par cannabis in their local dispensaries.

Even large companies such as Canopy Growth Corp have received scrutiny over false labeling on their cannabis products. The problem is, large cannabis producers don’t test the potency levels of every batch of cannabis produced. They use a static labeling approach that labels each strain with its highest content of THC.

The problem with a static labeling approach is that different batches of cannabis can vary greatly when it comes to CBD and THC content. Each pot may be labeled at 20% THC, for example, but the buds inside could contain a lower or higher percentage of the cannabinoid. 

Many consumers report finding lower percentages in their dispensary buds than is advertised on the labeling. This is likely down to the mass-produced nature of the weed combined with poor storage conditions, thanks to government legislation.

Of course, your local black market dealer is unlikely to test the cannabis they sell. However, the cannabis you purchase from some dealers on the black market is likely grown in smaller batches with closer attention and care. This could be why people find the illegal stuff much more potent than legal cannabis.

How Are Underground Cannabis Dealers Getting Around the Laws?

Now that cannabis is legal in Canada, illegal sales of the plant go under the radar in most cases. Some people have even found gray areas in the law that allow them to sell cannabis without “selling cannabis.”

People such as Jay LeBourque from Moncton run businesses within a legal gray area to compete against government-run stores that fail to deliver high-quality products for reasonable prices.

LeBourque opened his lounge — A Touch of Grey — the day after legalization. He sells stickers for prices anywhere between $3 and $30. When someone buys one of these stickers, he gives them cannabis as a gift. This is how he gets around the regulations set by the Canadian government.

According to law, you’re allowed to give (for no return) 30 grams of cannabis per day to anyone in Canada. This allows Jay to sell around 15 of his stickers with a free gift of two grams of cannabis.

People are happy with the quality of the cannabis gifted in this lounge, and because it’s not necessarily being sold, it can be gifted in small baggies — ensuring the buds stay at their best.

The fact that high-quality cannabis is being sold like this and people prefer buying it like this shows that something has gone horribly wrong during the legalization process. If cannabis is to be fully regulated in Canada, some things need to change before seasoned users start to trust legal weed again.

How Can Canada Improve The Legal Cannabis Market?

In order to attract more customers and convert the people still buying illicit weed to legal weed, a lot needs to change. 

First and foremost, the government needs to assess its legislation and requirements for cannabis distributors. Making it possible for distributors to use zip-lock bags rather than large containers will improve the quality of the cannabis upon sale and lower prices for consumers.

The government needs to speak to producers, distributors, and consumers to improve regulations if they want to gain more tax from cannabis sales. It seems the Canadian government isn’t particularly savvy when it comes to cannabis; therefore, an adviser with industry experience will improve the market for every party.

The government has a tight grip on the cannabis market, and although it’s understandable and sensible that the market is controlled, they should leave some of the finer details to the experts.

Adjustments also need to be made to the production side of things. As it stands, it costs over 500 000 Canadian dollars to set up a cannabis farm legally. That makes it impossible for most to set up in the business, especially those that may have been growing for decades before legalization — the ones that really know how to grow potent buds.

If the government adjusts setup costs, we should see more experienced people entering the market that knows what the market wants. Think of it as smokers growing for smokers rather than big corporations mass producing for a large market.

Bottom Line: Is Illegal Cannabis Really Better Than Legal Weed?

It would be unfair to say that all cannabis sold on the black market is much better than cannabis sold legally through dispensaries in Canada. However, the share divide in the market definitely shows that consumers still prefer to buy weed from their friendly local weed dealer. 

This alone proves that there’s a problem within the cannabis industry in the country. 

The fact that cannabis is legal in Canada is a brilliant thing. However, there’s still a long way to go before the market is where people would like it to be. The legal cannabis world is full of strong strains and high-quality cannabis, but poorly thought-out regulations detriment this. 

Some regulations ensure the consumer stays safe, and the cannabis is grown properly and to the highest standards, but other regulations seem to counteract these beneficial legislations. 

The truth is, many companies are producing some quality cannabis strains that are highly potent and full of flavor. However, it doesn’t matter how well a cannabis plant is grown or how high-end the strain is; if you store it improperly, it’s going to lose its aroma, flavor, and some of its potency.

In conclusion, we believe there must be some major legislative changes to improve the quality of legal weed, raise its potency, and lower its price point before the average cannabis connoisseur is going to be comfortable buying legally.