Shortage of legal weed would be a gift to black market, research suggests: Don Pittis - From CBC

 Shortage of legal weed would be a gift to black market, research suggests: Don Pittis - From CBC
 Shortage of legal weed would be a gift to black market, research suggests: Don Pittis - From CBC

FROM CBC.CA

It might seem the best way to protect Canadians from the evils of marijuana is to restrict supply and discourage advertising.

But new research indicates such an intuitive approach may actually have the opposite effect, including making the drug more accessible to kids and diverting supply from people who need it to treat pain or seizures.

Instead, based on evidence expected to be published this year, the best thing the government can do is increase supply and keep prices low.

"At the federal level, supply should be their main concern," says economist and policy analyst Rosalie Wyonch, who helped assemble the new data. 

While Canada's legal cannabis industry insists it is on track to squeeze out the black market, research from the C.D.Howe Institute, the Canadian think-tank where Wyonch works, contradicts that claim.The clear economic logic is that so long as there is demand beyond what the legal industry can supply when new legislation takes effect this year, a market supplied by criminals will continue to exist.

Evidence from places where weed has already been legalized shows the black market sector has actually boomed following a change in the law.

In the Canadian case, the C.D. Howe investigation indicates that immediately after recreational sales are permitted, illegal suppliers will continue to control about half the market, wiping out roughly $420 million in potential excise tax revenue that would otherwise be collected. 

 Medical shortage?

The shortage of legal product has led to fears that licensed producers will divert supply from medical marijuana users in order to fulfil contracts to supply recreational pot.

"There's nothing to incentivize producers to prioritize medical consumers, and in fact because of contractual arrangements to supply retail stores, they may actually be incentivized to supply the recreational market over the medical market," says Wyonch, who suggests the government may have to step in to protect medical users.Failure to do so could put the government in breach of a charter rights ruling that says people who are helped by the drug — especially for seizure control — must be allowed access to it.

Read the full story at CBC.CA
 

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