Black market pot shops ‘inevitable,’ expert says
Problems plaguing Ontario’s monopoly online marijuana retailer are fuelling the rise of black market delivery services that will be tough for police to snuff out, an industry expert warns. Since launching on Oct. 17, the Ontario Cannabis Store (OCS) — the only legal marijuana retailer in the province — has faced challenges ranging from weekslong delivery delays and product shortages to a data breach that saw thousands of customers’ personal information accessed. Police forces across the country have launched raids to shutter the remaining illegal pot shops, but authorities appear to be paying little attention to the black market delivery services popping up to fill the void.
The head of a cannabis business association says the OCS can’t compete with these types of illegal online businesses on price, product quality and delivery time. “Why are we here? This was an inevitability,” said Ian Dawkins, president of the Cannabis Commerce Association of Canada. Marijuana industry insiders had long urged the government not to clamp down on the black market before a reliable and robust system was established.
“They were warned that this would happen,” Dawkins said of the rise of alternative illegal sources.
In London, where at least five illegal dispensaries still operate in defiance of the law, posters on Richmond Row utility poles advertise a same-day marijuana delivery service.
These types of delivery services compete with national ones — many of them based in British Columbia — that typically offer lower prices, wider product selection and quicker turnaround than the OCS.
Ontario residents who placed orders with the OCS have reported waiting up to two weeks to receive their product.
Blaming the delays on Canada Post’s rotating strike and labelling issues, the OCS says it has cleared the backlog of orders after receiving more than 220,000 since its launch.
“Now, with the backlog of orders cleared, we are moving forward and returning to our one to three business day delivery expectation,” OCS president and chief executive Patrick Ford said in a statement.
“Our priority is to continually improve the customer retail experience for the many Ontarian that are buying safe, quality recreational cannabis products from the OCS.” Privately-owned bricks-andmortar dispensaries will open in Ontario on April 1.
The Alcohol and Gaming Commission of Ontario, the agency responsible for regulating the businesses, will start accepting applications for an unlimited number of retail licenses on Dec. 17.
Dawkins says the arrival of storefront dispensaries in Ontario will help combat the black market, but it still won’t address the product shortage issue.
“You at least start competing on access. That’s a good start,” he said.