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Legal cannabis sales growing but black market remains on top

Statistics Canada says the black market is a $4 billion-a-year industry
Photo from The Canadian Press

Between June 2018 and June 2019, Statistics Canada reports legal cannabis sales have roughly tripled.

This has left some consumers wondering why it has taken so long to see some progress.

Benjamin Smith, Corporate Communications Manager, James Wagner Cultivation, says many companies have worked beyond production issues and are closer to meeting demand.

"Some of the approvals from Health Canada didn't come on time with some of these companies. Some public companies face challenges in terms of financing and actually building out their growing operations. So at first, under supply was a big issue, of course this caused some supply chain issues and prices to be way too high comparative to the black market."

According to Statistics Canada, the cannabis black market remains a $4 billion-a-year industry. Smith says the legal recreational marijuana market has the potential to become a $7 billion-a-year industry.

"As everything has gone on, it hasn't been smooth. Of course, we were with a lot of issues with supply chain issues at first, which caused not enough product to be on store shelves. It caused the price to not be competitive with the black market price." he told Kitchener Today with Brian Bourke on 570 NEWS.

JWC is strictly a medical marijuana facility for now. Smith says the recreational market is roughly three times the size of the medical market.

"As we speak today, I think the latest stats show that only about three out of ten cannabis users are actually using the legal market right now, and of course, that's a problem. That means that the potential of the Canadian cannabis market, which is probably somewhere in the $7 billion-a-year range, has only been a fraction of that."

During the second quarter of this year, Statistics Canada estimates Canadians spent $918 million on illegal products versus $443 million for legal recreational use in the same time period.


Maddie Demarte

About the Author: Maddie Demarte

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