No, your weed dealer won’t be out of business on July 1, 2018 And no, that won’t mean legalization has ‘failed’

There’s a lot of concern these days about legalization not succeeding if it doesn’t satisfy a myriad of goals that were never necessarily part of the plan.

Concerns with price and supply of legal cannabis on day one, while entirely valid, are frequently being framed in ways that make it sound like if cannabis isn’t a dollar a gram and dozens of strains and products available in every corner store, that legalization will be a failure.

This really couldn’t be further from the truth. Yes, one of the Liberal government’s stated goals with legalization has always been to take ‘profits out of the hands of criminals’, but the expectation that this is a goal that can or will be immediately realized is just not realistic. And the claim that legalization will ‘fail’ if it doesn’t succeed in this unrealistic goal is inaccurate.

Furthermore, taking profits away from ‘criminals’ is not the only goal of legalization, and so low prices are not the only concern. The government of Canada’s goal with legalization has also always been based around a public health approach that seeks to not normalize or increase use, especially among young Canadians.

That means that the government has to find the balance between a need to keep prices (and the taxes that add to the cost) low enough to be a realistic alternative to the black market, as well as keep the cost of cannabis high enough that it doesn’t encourage use or diversion of product back into the black market.

The average cost of legal medical cannabis in Canada is currently a little under $10 a gram. The average cost of cannabis in a dispensary, based on our own surveys of public prices, is a little more (which makes sense given the added cost of a retail location). Many dispensaries and LPs currently sell some varieties for well over $10 a gram, but unlike LPs, many dispensaries and many other black market sources also offer lower prices when purchases are made in larger quantities.

Still, consumers in many markets in Canada currently seem to have little problem paying upwards of $12 or $14 a gram or more for ‘top shelf’ cannabis in many dispensaries. So the idea that consumers will balk at similar prices at legal stores seems somewhat unfounded.

Another misperception at play, I think, when people refer to legalization ‘failing’, is the idea that it has to appeal to the current, average cannabis ‘connoisseur’. The cannabis connoisseur is not just your average toker or occasional weekend-at-a-party user, the connoisseur is the user with extensive connections to high quality varieties from growers deeply embedded in Canada’s well established black market.

The reality here is that these people are not all that likely to care about legal access at the implementation of legalization anyway. They already have their hookups, their mail order marijuana sources, their guy down the street. And because those are not likely going away anytime soon, it’s unlikely they will care much to go through the hassle of getting legal weed anyway.

But that doesn’t mean legalization ‘fails’ if it can’t appeal to this cross section of consumers on the first day (or the first month, or even the first year). For the average Canadian, the novelty and security of buying legal cannabis from a legal store will arguably be seen as enough of a success. Sure, there will be grumbles and complaints and almost certainly product shortages. But it will still be legal cannabis. In a store.

In Washington state, for example, the average price per gram of cannabis in July, 2014 was $25 to $30 (US). By January 2016 it was just under $10.34, according to the Washington Liquor and Cannabis Board. And in Uruguay, legal cannabis with only 2% THC still sold out in a matter of hours from numerous locations from long lines of consumers who seemed happy to just have the chance to be a part of history.

This is a process, not something that starts and ends in one day. Sure, there will be problems. There will almost certainly be product shortages, like just about every other place that legalized. There will likely be higher prices in the beginning that will come down over time, just like in other jurisdictions.

And like those jurisdictions, the black market will continue to operate, quite well, for some time. When Washington legalized, they had a stated goal of capturing only 25% of the market in the first year. Black market busts still happen in legal states like Colorado, Oregon and Washington, and the black market continues to do plenty of business.

No one would say legalization has ‘failed’ in those places. Well, okay, almost no one. The market has already improved in states like Colorado and Washington, with prices and even taxes coming down in some places, and with more and more of the market being captured by a legal, regulated industry.

But the black market will of course continue. And sure, you can still probably buy a half pound of really great weed in BC for about $1000 or so. And no, legal stores are not likely to offer that any time soon. But that doesn’t mean legalization will have ‘failed’.

And why would we want to even pretend it would?

Yes, legalization needs to ensure prices for cannabis are competitive with the existing black market. No, there will not be a mass migration of existing, embedded cannabis consumers to the legal market on day one. And, frankly, this will probably help ensure stores don’t run out quite as fast.

But for the general public that doesn’t have a way of getting great weed from their buddy down the street, and for many Canadians who don’t have access to a hundred dispensaries (like people who live in Vancouver or Toronto do), buying average cannabis at an average price legally, from a store or even online, in and of itself will likely be a success.

And for the rest, yes, you can still likely get your cannabis the same way you did on July 2 as you did on June 30.