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Drug dealers still control 33% of Canada's cannabis market despite legalization

Marijuana.© Provided by Toronto Sun

Five years after Ottawa legalized marijuana, 33% of the market is still controlled by drug dealers, says the Department of Public Safety.

“One of the main goals of legalization of cannabis was to reduce criminal activity by keeping profits out of the pockets of criminals,” the department wrote in an October 17 briefing note Cannabis Black Market.

“The illicit drug trade provides organized crime with one of its most financially lucrative criminal markets. A well-regulated legal cannabis industry is in place and is significantly displacing the black market,” said the note. “Today the legal cannabis market accounts for approximately 67% of market shares. However, there continues to be a well-entrenched illegal market in place.”

The briefing says drug dealers sell marijuana at a 55% discount compared to licensed retailers.

“As the legal market matures there will be downward pressure on wholesale prices as producers’ costs decline. However, long-term prices are less predictable as consumer tastes and product offerings, including value-added products, evolve,” the findings say.

“One has to be careful not to move above the illegal price,” Mostafa Askari, then-assistant budget officer, told reporters at the time. “As soon you move above the illegal market price, based on our estimates, you lose a lot of market share to the illegal market so that defeats the purpose.”

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“There still exists a flourishing and illegal cannabis market in Canada,” said the report Operational Alert: Laundering Of Proceeds From Illicit Cannabis.

“Such illegal markets contribute to increased risk of harm to Canada’s financial system and its citizens through significant loss of tax revenue and increased funding of criminal activity by organized crime groups.”