Black market pot boon hits city
Scoring illegal weed easier with increasing online retail shops
Designed to push out the illicit drug trade, Canada’s recent decision to legalize marijuana has instead been a major boon to the black market, including in Windsor. Despite city council’s recent “opt in” vote to permit bricks-andmortar retail pot operations, it’s unlikely Windsor will see any such business established before 2020 at the earliest. Meanwhile, a local black market entrepreneurial surge is underway within the municipality.
A rapidly growing number of online retail operations focused on the Windsor market has been sprouting up since the beginning of the year. These websites and apps offer strains of pot that are much cheaper than what the province’s own online store is selling.
And all of them promise much quicker delivery, usually in under two hours. But they’re unlicensed and illegal.
A large collection of these new pot-peddling businesses can be found on Weedmaps.com. With just a couple of keyboard clicks, past a screen asking whether the user is 19 or older and to inform the visitor that “weed is legal” in so-called High Canada, a local smorgasbord of retail pot products awaits.
Select a Windsor-based company, from DopeHeadz or Ambassador Buds to Bud Haven and WeedKingdom, and it’s not just flower that can be purchased but resin, oil, concentrates and edibles. Unlike the Ontario Cannabis Store, where delivery can take days or more, at Onbud.ca, which serves Windsor, LaSalle and Tecumseh, delivery is promised in under two hours. On Leafly.ca, another online weed website, the Ontario Cannabis Store commands the top placement among the local listings, and the government operation gamely states it’s “Ontario’s only legal store,” but the OCS competes on the same webpage with underground operators purporting to offer some of the same strains of recreational marijuana at lower prices with speedier delivery.
The reviews are pouring in and they’re good.
“Super cool non sketchy dude delivered within 40 minutes of ordering. What a time to be alive,” one customer posted on the webpage of one such operation doing door-todoor deliveries in Windsor. “Ontario has been bungling up its retail strategy ... it’s been terribly mismanaged,” said Anindya Sen, an economics professor at the University of Waterloo who specializes in studying Canada’s pot industry. One of the biggest arguments made by the Trudeau government in favour of legalization was to root out the criminal element, but based on how the provinces have been rolling out its implementation, “it’s going to be very difficult to eradicate the black market going forward,” said Sen. Ontario, in particular — and regardless of whether it’s the current plan by the Ford government or the previous one by the Wynne Liberals — has allowed the underground to flourish, according to critics like Sen.
Gone with legalization last Oct. 17 was the negative social stigma of marijuana use, but for some, the easiest access to pot is the black market.
After legalization a lot people began finding dealers, Sen said, adding, “it’s not surprising the black market is responding this way.” Whether these illegal online pot operations have landed on the radar screens of the authorities, local police aren’t telling.
“I wouldn’t comment on any active investigations,” said Windsor Police Service Sgt. Steve Betteridge. But one thing is for sure, according to Betteridge. There should be “no misunderstanding” among those involved that their enterprises are criminal.
“The community understands the law,” he said. “The only legal avenue at the current time is the Ontario Cannabis Store.” With access to a number of weedspotting tools on the internet, finding even illicit bricks-and-mortar establishments to purchase illegal pot in Windsor is not a huge challenge.
“I’m just educating, bro,” the operator of one such nondescript establishment told the Star on a recent visit. Arrayed inside a glass counter in front of him were a variety of jars containing a wide selection of bud strains. But he insisted to a reporter that his business, located near the University of Windsor, but without any exterior signage advertising what is inside, was strictly educational. “I don’t sell,” he said, adding, however, that he does accept “donations.” The OCS, regulated by the Alcohol and Gaming Commission of Ontario, can only purchase cannabis product from the licensed producers approved and regulated by Health Canada. The underground, however, sources its untaxed product from wherever.
“I’d be absolutely concerned — you don’t really know what you’re getting,” said Betteridge. “You’re taking a risk — you’re purchasing something and there’s nothing legal to back it up, you have no guarantees on exactly what it is.”
But that’s where a website like Weedmaps — a search tool for medical and recreational marijuana dispensaries, brands, deliveries, deals and doctors — comes in, according to Sen, an economics professor who studies and evaluates the efficiency of markets.
“It’s set up like TripAdvisor,” he said, referring to the global travel website that relies on user-generated content and feedback. “It’s very easy to use, and you rate the dealers, you rate the quality.” Weedmaps, based in California, doesn’t appear to discriminate against a business that might be legal in one state or province but illegal in the next.
“It’s coming regardless — people want in on it,” said Windsor’s Kat Blondin, who, along with business partner Jessica Sanchez, is among the Windsor economy’s first entrepreneurs to emerge out of pot legalization.
The pair opened their Pretty Baked Cannabis Co. at 1067 Drouillard Rd. in early January. The Ford City business is starting with accessories — everything from pipes, bongs and rollers to grinders and vape pens — to service the budding pot market, and Blondin said the plan is to develop an on-site café and provide seating for folks who have questions.
“Now that it’s legal, people want to know more,” she said, adding the young entrepreneurs have seen a more mature clientele, “especially people in their 50s and 60s.” They don’t sell pot at Pretty Baked, but Blondin said there are already other — and legal — ways to get in on Canada’s newest industry. And she won’t judge others who have jumped into the illicit market. “These people are not getting the go, but they’re going with it,” she said. Blondin compares what Weedmaps and other online services are doing for pot to what Uber, the ridehailing company initially banned in some cities, did with its Uber Eats, an online restaurant food home delivery service.
One Windsor pot consumer, who asked not to be identified, told the Star he was able to place an order with one of the online businesses and pay cash at his door 45 minutes later. He said the OSC has recently improved but that the delivery wait time can still be three to seven business days — too long a wait for those who want to party, like, tonight. And, he added, his black market purchase cost less than half what he would have been charged at the province’s OCS.
“We’d be better off if the city and the province would work with the stoners,” said Blondin. “They’re people who have a passion for it.” For now, she said Pretty Baked has no interest in pursuing a dispensary business licence, should the province open up that opportunity in 2020. “It’s just a mess,” she said of the current situation. While not pleased with the way that pot retail is being rolled out in Ontario, Blondin said she recognizes that the provincial and municipal governments are “just doing their jobs, trying to keep people safe.” It’s not something that upsets the business partners.
“We’re stoners — we don’t get angry,” said Blondin.
Part of the marketplace mess, said Sen, was the way the federal government permitted each province to make up its own rules, and Ontario then allowed each municipality to choose whether to opt in to retail pot sales.
Towns and cities that opted out, he believes, will be more vulnerable to underground businesses offering home deliveries of illicit pot. Those municipalities, he predicts — including larger cities like Mississauga, Oakville, Burlington and Brampton — will see “a flourishing, thriving black market, for sure.” “In Windsor, which opted in, you could, paradoxically, have no problems, but in LaSalle, Tecumseh — neighbouring municipalities — it’s the opposite,” Sen said after being informed of how those councils voted.
Rather than the current “hodge podge,” he said, what’s needed is a “sufficient” number of retail stores to satisfy consumer demand and then sufficient funding given to municipalities, through cannabis taxation, to properly regulate those businesses and address resulting social issues.
“You’ll never eradicate the black market, but you can minimize it,” said Sen.
Nic Nedin, of Xtract Biotech Inc., a local cannabis consulting firm, said Windsor’s illegal market had zero online retail presence just a month ago.
“In the new year, they all started popping up,” he said. “The public is seeing the Ontario government not moving, so they may as well go with the black market people.” Nedin said the underground sellers are sourcing their product from medical marijuana users who have their own grow licences or directly from illicit growers in B.C. Even at greatly reduced prices over what the legal market is offering, “they’re making a very nice profit,” he said. And, unlike the illegal bricksand-mortar establishments, two of which Windsor police have raided since cannabis was legalized in October, the online black market will be much harder to police, Nedin predicts.
HerbTown Windsor was one of the online companies advertising its quick delivery service on Weedmaps. Shortly after the Star attempted to communicate with the business, its Weedmaps presence disappeared. Within days, however, several new Windsor suppliers had appeared on the website that offers free listings.
“You’re going to see shadow games, where they pop up and then shut down,” said Nedin. “Until we have a foothold in the legal market, that’s what you’re going to see.” Someone who is involved in Windsor’s cannabis black market told the Star that, “for some people, it’s surreal — to say it’s taking off is an understatement.” The person, who, like others contacted for this story, asked not to be identified, said some of those who are involved have been investing substantial amounts of money. The person also pointed to a growing number of new bricks-and-mortar establishments popping up across the city, regardless of the illegality. Using its own proprietary software to analyze local online pot sales data, Nedin said Xtract Bio- tech determined that AAA quality flower was selling on average for $5 per gram on Windsor’s black market, “about $4/g lower than the lowest priced item at the OCS.” Statistics Canada in January reported that its first analysis of the new market pegged the price of a legal gram of cannabis in Canada at nearly 50 per cent more than illicit pot. The federal agency cited initial delivery problems and widespread product shortages at governmentrun cannabis retailers as having helped encourage consumers to switch to the black market. Drug dealers and other illegal sources, like unlicensed websites, were where 42 per cent of Canadian recreational cannabis users obtained their pot in the previous three months, according to another Statistics Canada survey released Feb. 7.
A concerned Windsor parent who contacted the Star by email, but who could not be reached for further comment, expressed alarm in late January over observed illicit street deliveries: “Some of our kids have already purchased from them.”
Windsor police spokesman Betteridge said his department’s responsibility is to “enforce the law of the day, and our job is to keep our community safe.”
He said a crime is a crime and that Windsor police have the tools to investigate internet operators. Anyone who witnesses illicit drug transactions, he said, should contact police or Crime Stoppers anonymously.
“We will investigate each and every complaint,” said Betteridge.
You’re taking a risk — you’re purchasing something and there’s nothing legal to back it up, you have no guarantees ...