It was back in 2015 when the current Prime Minister Justin Trudeau started the discussion for the legalization of cannabis possession for casual use. It was originally supposed to be available for sale recreationally on July 1st, 2018 but eventually got pushed back to October 17th, 2018. Canada is only the second nation, after Uruguay, to fully legalize the drug.
There were a lot of people who argued against the legalization of cannabis because it would allow for more people to have access to the drug but based on Statistics Canada’s National Cannabis Survey, the use of cannabis stayed around 15 percent.
Customers want quality, but not at the cost of availability!
With the legalization of cannabis, consumers were looking to obtain higher quality and more consistent products. Licensed producers go through significant testing and are required to properly label their products with ingredients mix and potency of chemicals.
Packaging, labeling, and contamination have been problems that these producers have faced, which has kept the black markets active. Early on, product shortages were a major issue and many consumers were turned off by the long wait times.
Currently, edibles (cannabis foods and drinks) aren’t legal in Canada, which leaves a huge gap in the potential market. It is estimated that edibles consume 43 percent of demand in Colorado and California, where cannabis has been legal for a while.
Price is still king!
At the end of the day, consumers are still looking for the best deal when it comes to their cannabis purchases. Statistics Canada estimates that the price of cannabis is around $9.70 per gram for legal products while the black market is able to offer prices around $6.50 per gram. This was the second most important criterion for cannabis consumers.
One area where legal cannabis can compete against the black market is physical brick-and-mortar stores. Shoppers are able to see and smell the product before purchasing and they are also able to consult with staff.
At the end of the day, consumers want convenience!
Studies have shown that easier access to legal cannabis through physical stores or online delivery services have shifted consumers away from the black market.
Cities are cautious about allowing brick-and-mortar stores to open up, so Ontario’s plan for same-day delivery of online orders would help with this problem.
Quality! Convenience! Competitiveness!