Pubdate: Tue, 26 Dec 2017
Source: Sundre Round Up (CN AB)
Copyright: 2017 Sundre Round Up Publishing Ltd.
Author: Simon Ducatel


Unreasonable retail prices will not drive people to buy

As Canadians prepare to celebrate the New Year, the country's
provincial and federal governments continue to work on legalizing cannabis.

Provided everything comes together according to initial plans, the
monumental policy failure that has for decades treated a health issue
as a criminal one - otherwise known as prohibition - will finally be
over this summer.

But a growing question looms as leaders attempt to legislate the

At a proposed price point that does not even make the slightest
attempt to compete seriously with rates available on the black market,
will people actually be convinced to ditch their dealers and do
business with legal, regulated retailers?

At least one grower and aspiring entrepreneur who wants to eventually
open a shop in New Brunswick seems doubtful.

"Ten bucks a gram is definitely not going to run the black market out
of business," Thomas Clarke recently told the St. John's Morning Show
as reported on by the CBC.

"If the whole idea of legalization was to stop the black market, then
$10 a gram isn't going to do that."

An agreement between the provincial and federal governments suggests
setting the retail price at about $10 a gram, taxes in, the CBC reported.

However, Clarke points out that many people are currently paying about
as much or even less than that to their dealers.

"Right now if someone wants to go buy marijuana in the city (St.
John's), they can buy a quarter ounce (seven grams) for $60. If they
want to buy an ounce (28 grams), that's $200," he said.

"No regular marijuana smoker who's currently paying $200 an ounce is
going to come see me at my new store to pay $280 for an ounce. It just
doesn't make sense."

He is not wrong.

Fixing the price of pot - basically rigging the market - seems
completely counterintuitive to the entire intention of legalization,
which in large part was sold as an attempt to undermine the black
market, regulate the industry, and generate desperately needed tax
revenue that can in turn be funnelled into health care as well as
awareness and outreach programs.

After all, no one likely remembers a time when the Hells Angels or
some other criminal syndicate or cartel decided to - out of the sheer
benevolence of the cockles of their hearts - donated millions of
dollars to social services and programs.

There's no fixed price on booze. The market largely is left to
determine what will cost a pretty penny, such as a fine bottle of aged
wine or triple distilled whiskey, and the lower quality yet more
affordable alcohols such as Lucky Lager beer.

So whoever actually thought fixing a price for cannabis that's nearly
identical to or even more than what the black market is already
charging would be a good idea needs to re-examine his or her position.

The black market is notorious for charging higher rates because of the
risk involved in running an illicit trade that could potentially
result in time behind bars or a violent confrontation with someone
else vying for control of turf.

That means the best way to erode the black market's profit margins is
to substantially undercut dealers and appeal to consumers not only
through competitive pricing, but also through a regulated product
grown responsibly without unknown and potentially dangerous substances
laced in.

Some people surveyed have indicated that they, regardless of the
proposed price, intend to purchase legally from a retailer, but many
more remain to be convinced.

There are still several months before legalization is set to become
official policy.

Let's hope this country's governments are serious about taking a bite
out of the black market, as opposed to merely shamelessly attempting
to gouge consumers for the sheer sake of it.
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MAP posted-by: Matt