Price, the main reason for buying black-market cannabis on legal markets

Legal cannabis is becoming increasingly accessible. However, in countries such as the United States and Canada, where legal markets are in place, black-market sales persist and sometimes make life difficult for the legal market.

According to a new survey, the biggest determining factor is price.

The investigation, conducted between 2019 and 2020 and published in the Journal of Studies on Alcohol and Drugs, surveyed 12,000 cannabis users in Canada and the United States and found that price was the primary factor, surpassing ease of access, which is the second-leading reason why people continue to choose illegal weed.

The authors of the survey write: «Over the course of the two years, two barriers to legal purchase were cited most frequently. In total, about one-third of Canadian respondents and 27% of U.S. respondents cited price, while about one-fifth of Canadian respondents and slightly fewer U.S. respondents cited inconvenience.»

«In 2020 compared to 2019, several factors were cited less frequently as barriers in Canada, including lack of convenience and the location of legal sources. Certain barriers increased in the United States, including slow delivery and the need for a credit card,» note the study’s authors.

In the United States, the black-market sale of cannabis is one of the main obstacles to establishing a functional legal cannabis market. States like California, which legalized cannabis in 2016, have missed out on part of the benefits of legalization, including by making it difficult and expensive to enter the legal market for growers and businesses, which results in cannabis prices that are too high compared to the black market.

Legalization and the Fight Against the Black Market

One of the Official objectives of cannabis legalization in Canada was to replace the illegal cannabis market with legal and regulated retail outlets.

Canadian data suggest that’About half of Canadian consumers have regularly purchased cannabis from legal stores in 2020—compared with 24% in 2019—and 13% typically purchased cannabis from legal websites during those two years.

Reports from the United States have shown that the size of the illegal market varies among states that have legalized recreational cannabis. In Washington State, three years after legal retail stores opened, estimates of overall demand exceeded the number of distribution licenses issued, suggesting that a significant amount of cannabis was still coming from the illegal market.

In Oregon, semi-annual reports suggest that legal supply exceeds demand estimates, leading to low prices and a sufficient supply of legal cannabis.