Legal pot a tough sell in price and quality

Tocombat organized crime on pot sales in Ontario, legal marijuana is going to have to be competitive with the black market on price, availability, quality and variety.

With legal pot coming July 1 — unless Prime Minister Justin Trudeau delays the law — Premier Kathleen Wynne’s provincial government already appears to have conceded the field on price and availability.

Finance Minister Charles Sousa said last week Ontario is looking at selling legal pot for about $10 per gram.

That compares to an average street price in Ontario of about $8.64 per gram, according to a report by the federal parliamentary budget officer late last year.

Legal pot will only be available, to start, online or at 40 LCBO-run stores, sold from behind a counter like the LCBO used to sell alcohol half a century ago.

While the province is planning 150 legal pot stores by 2020, it’s up against, according to the RCMP, 300 criminal organizations across Canada involved in the $7 billion a year illegal pot trade. The fact the provincial government estimates its initial revenues from legal pot at $100 million annually, indicates even it doesn’t think legal pot is going to make a significant dent into the illegal market any time soon.

In terms of pricing pot, governments face the same dilemma they did with cigarettes.

By imposing high taxes on them, they created a thriving black market in a legal product, which could also happen with pot.

That would defeat the purpose of legal pot which is, according to Trudeau, keeping it out of the hands of children. (In Ontario, anyone under 19.) Having all but conceded the field to organized crime on the price and availability of pot, the only other factors governments can compete on are product quality and variety. Don’t hold your breath. Indeed, a bigger dent on illegal pot sales could come from people being able to grow up to four marijuana plants at home for their personal use after legalization.

Finally, might the government eventually try to boost lagging sales of legal pot the same way it’s trying to do with lagging electric vehicle sales — by offering consumers massive public subsidies?

Probably not, although with this government, we wouldn’t rule anything out. — Postmedia News