Legal and illegal markets for marijuana in Canada

from Market Design at http://bit.ly/2FrtZOK on January 14, 2019 at 01:41PM

The Canadian newly legal market for marijuana is having trouble competing with the illegal market. It may be a question of design:

Canada legalized pot in October. But its black market is still going strong

"When the government launched Canada’s official recreational-pot market on Oct. 17, it was banking on the idea that many users would prefer to buy legally and that the black market would quickly begin to fade. It says things seem on track, with “early reports of a 65 percent reduction for illegally sourced products,” according to a spokeswoman for the minister in charge of the cannabis file.

But there are also signs things aren’t going as expected.
In a national poll Ipsos conducted for Global News a month after legalization, more than a third of Canadian cannabis users said they were still buying from their regular dealers and hadn’t even tried the legal system.  
"The government’s most jolting decision, illegal dealers here said, was to structure the new industry in a way that tended to bar them from it. In 2015, when the government first committed to legalization, many of them planned to apply to open private shops.
“All of us thought, ‘Okay . . . I’m going to be able to come out of the shadows and I’m going to be able to pay taxes,’ ” David said. “As time went on, it became clear that’s not what they were after.”
"In Quebec and several other Canadian provinces, all cannabis stores are government-run, leaving no path to legality for people like David, who has worked in the underground industry for more than a decade, operating his business full time for several years."
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