BLACK MAR­KET

National Post (Latest Edition) - Financial Post Magazine - - TOKING -

One of the big­gest prob­lems fac­ing public pot com­pa­nies is the surge in grey mar­ket dis­pen­saries that sell prod­uct of un­known ori­gin, es­pe­cially in cities such as Van­cou­ver and Vic­to­ria. Stewart says there is one set of rules gov­ern­ing the li­censed com­pa­nies, busi­nesses that have had to over­come a lot of hur­dles to get to their po­si­tion, while the small dis­pen­saries seem to op­er­ate out­side the law, though there was plenty of spec­u­la­tion in Septem­ber that the RCMP would step in to rec­tify that sit­u­a­tion.

“All the com­pa­nies li­censed are strug­gling be­cause ev­ery­one is buy­ing from the black mar­ket,” Stewart says. “You can’t ad­ver­tise in Canada. You can’t show pic­tures of bud on your web­site. But you can stick it to the man and walk down to Granville Street and talk to a beau­ti­ful lit­tle barista who is tat­tooed head to toe and who will give you a cof­fee and let you pick from one of 60 strains. That’s why there are over 100 dis­pen­saries op­er­at­ing in Van­cou­ver.”

Booth says pric­ing is also an is­sue. “We need to be com­pet­i­tive and our cost per gram is very good, I think,” not­ing that a gram costs $1.50 and sells for be­tween $7 and $10. “We’re com­fort­able there’s a sta­ble price.” But Stewart is wor­ried the black mar­ket is win­ning. “The illegal oper­a­tions are the dis­pen­saries that do 10 times the cannabis sales of all the le­gal com­pa­nies com­bined,” Stewart says. “That’s Van­cou­ver and Vic­to­ria and there’s a pretty pro­lific cannabis cen­tre.”

Wayne, how­ever, says he’s con­vinced the mar­ket in time will tran­si­tion to more re­li­able, le­gal and li­censed prod­uct. “In­creas­ingly, we are hav­ing peo­ple con­vert­ing

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