More Than 80% of Canadian Pot Users Are Still Buying Black Market Weed

It’s been more than a year since Canada became the second country to fully legalize cannabis for adult use. But for the country’s many black market growers and dealers, the legal market has barely put a dent into halting the underground industry.

According to a new report from market research firm TheCannalysts, and first reported by Marijuana Business Daily, Canada’s legal cannabis industry has only been able to produce some 14% of the country’s monthly cannabis demand — and at nearly double the price of black market weed. In turn, that means that more than 85% of Great White North’s ganja is still coming from illicit operators. In June of this year, TheCannalysts say that 11,178 kilograms of legal weed were sold across both medical and recreational dispensaries. On the flip side, the analytics firm estimates that Canadians consume some 77,000 kilos of weed every month.

But after months of consistent supply shortage across every province, Canada’s legal weed producers are finally catching up to the country’s demand. After those lowly June statistics, industry experts say that licensed cultivators are now producing 62,000 kilos of weed a month. And with the addition of outdoor grows harvesting next month, legal growers are poised to quickly turn the supply drought into a significant surplus.

Once that supply toggle has shifted, TheCannalysts researcher Craig Wiggins says that competition could quickly turn into market saturation, leaving some companies stranded in a crowded market searching for an exit door.

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“Health Canada will need to have an action plan in place to deal with bankrupt companies,” Wiggins said. “They are coming — and they will bring with them inventory of varying quality. Bankruptcy consultants are licking their chops to get their hands on this industry. Without clear procedures, all value in a bankrupt company will go to the administrators of the bankruptcy.”

In the meantime though, Canadians are having no trouble locating bud on the black market, and regulators are still struggling to weed out illicit sellers. And with more weed on the streets than there is on dispensary shelves, Health Canada is still fighting an uphill battle.  

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