Why Canada’s Mail Order Cannabis Business Doesn’t Go Away?

When the legalization of weed was first proposed in Canada in 2015, one of the many benefits promised to the Canadians was a reduced organized crime. The reduction in crime was supposed to result from cannabis business profit shifting from criminals to government and legal businesses. However, now that cannabis is legalized, there are no signs of illegal distributors shutting down their operations. Many businesses, in fact, appear to be operating not just in the present but for the future as well.

The online black market for weed has been dominated by mail order marijuana businesses. These businesses offer alternatives to Canadians for the marijuana products available legally. Online sale has made it more convenient for Canadians to purchase cannabis right from the comfort of their home. Governments have realized the present demand and opened their own online stores to take over the market.

According to analysts, online sale of cannabis could increase by up to a third after its legalization. This, in part, is because no legal brick and mortar retailer would be operating in Nunavut and Ontario for some more time. However, the ability of retailers to compete with illegal mail order marijuana distributors offering lower prices, incentives like discounts and wider selection is questionable. The attractive advantages they offer can appeal to a number of Canadians to buy from the black market.

The online black market certainly has an advantage over legal retailers. Due to a need for research and education on edibles and concentrates, provinces have not yet legalized these products, giving rise to an increase in illegal operations. In Colorado, concentrates account for about 30 percent while edibles nearly 15 percent of the market. As these two markets grew considerably after legalization, the market for dried flower has fallen by about 25 percent. These numbers are very close in other legal states and show the realistic picture of the marijuana industry in Canada.

Legal marijuana also struggles with pricing offered by online mail order marijuana in Canada. A glance at the online distributors shows that the pricing is friendlier to consumers not only as they don’t levy taxes but also because they offer a lower price per gram on an average. Legal marijuana retailers are not able to compete with the heavy discounts offered by black market sellers. Consumers can buy cannabis for as little as $3.40 per gram when buying in quantities.

Being aware of the opportunity, black market mail order marijuana sellers invest and operate in business with the intention of luring Canadians to purchase from them instead of the legal retailers. These businesses are clearly making concentrated efforts to convince Canadians that illegal marijuana sold by mail order is their best option.

Canadians seem to be responding to the black market’s message. It is expected that few of the consumers buying marijuana from black market will consider moving to legal weed. It is only through offering a wider variety of marijuana products and loosening the regulations that legal retailers can compete with these black market retailers.