Canada’s cannabis black market continues to shrink following legalisation

20th May 2021

The gap between the legal and black cannabis market continues to widen as Canadians spend almost $1bn on legal cannabis in 2020.

MJBizDaily reports that according to the latest Statistics Canada data, Canadian households spent $800 million in the fourth quarter of 2020 while more people keep turning away from the illicit cannabis market in the country.

Since adult cannabis use was legalised in 2018, people and businesses on the black market have lost more than $400 million in sales.

The gap between the two markets is now visible: the data shows that cannabis users spent more than $169 million more on the legal market than on the “streets.”

The paper says the legal recreational cannabis industry overtook illegal transactions for the first time in the third quarter of 2020.

It is reported that the gap has been significantly growing since more cannabis shops have been opening in Canada – for example, Toronto had only seven regulated stores at the beginning of 2020 but ended the year with 87.

According to the data, “extracts and concentrates” sales tripled in 2020.

On the other hand, the black market continues to erode. While in 2013 it was worth more than $1.4 billion, it has halved over the last eight years.

It is also reported that medical cannabis sales have plateaued over the last few years.

It comes after American researchers found that “in states where cannabis has been legalised the illegal drug market has taken a massive hit.”

Lead author of that study, Dr Angélica Meinhofer, said: “Our exploratory findings suggest that markets for illegal drugs may not be independent of legal cannabis market regulation.

“As more states move towards legalisation and additional post-RCL implementation data become available, we’ll need to do more research to determine whether recreational cannabis laws cause those changes in the illegal market and what happens in the long-term.”

With more studies and official data to be published in the near future, it will be interesting to see what European leaders will do next when it comes to cannabis policies around the continent.

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