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For the First Time Ever, Ontario’s Legal Cannabis Sales Exceed the Illicit Market’s

January 17, 2022 08:00 am ET
For the First Time Ever, Ontario’s Legal Cannabis Sales Exceed the Illicit Market’s

One of the most significant goals of many legalization efforts is to draw people away from the illicit markets. While the illicit markets are still thriving, the Canadian province of Ontario has shown that the legal cannabis market can actually overtake the illicit. New data on the cannabis sales in Ontario’s legal cannabis market showed that the majority of cannabis purchases between July and September 2021 were from legal retailers.

Specifically, BNN Bloomberg reports that the Ontario Cannabis Store (OCS) found that 54.2% of “the pot purchases made in the province between July and September were linked to legal retailers.” The figure is based on self-reported data from Statistics Canada, meaning that the data may not be 100% accurate. Nonetheless, the data signals a major shift in cannabis culture.

The Rise of Ontario’s Legal Cannabis Industry

The increasing success of Ontario’s legal cannabis market hasn’t come about by chance, but rather as a result of adequate regulation. One of the largest contributing factors has been the reduction of illegal operations. BNN Bloomberg reports that police have “raided a series of unlicensed dispensaries” in the province.

Additionally, in hopes of competing with the illicit market, legal cannabis operations have been “slashing prices,” according to BNN Bloomberg. While legal retailers provide safer and more accessible cannabis for consumers, they’re also known for much higher prices than those found on the illicit market.

According to the co-founder of Calyx + Trichoes, Jennawae McLean, it’s not hard to believe that legal sales have surpassed illicit sales due to the exponential increase in regulated cannabis stores. “The number of stores in Ontario has grown exponentially over the last…two years. It’s really just completely exploded,” she stated. Ontario had just 53 cannabis stores two years ago, 183 last year, and is currently at a whopping 1,115 stores.

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Experts speculate that the larger and safer variety of cannabis products is drawing people into the legal market. “Yesterday I was working at one of my stores and I had this guy come in, and he was overwhelmed with the size of our menu, which, to be fair, is 27 pages long,” said McLean. The OCS explains that there were 1,842 cannabis products on offer in the most recent quarter, with 389 having just been added.

While products like beverages and topicals account for the least amount of sales, these niche products give the legal market an edge over the illicit one. Lori Hatcher, head of marketing at Truss Beverage Co., explains, “This is a category that doesn’t really exist in illicit, so it was really important to actually help bring those consumers into the legal market.”

Cannabis Laws in Ontario

According to Ontario’s cannabis laws, people in Ontario can only buy, use, possess, and grow recreational cannabis when they are 19 and older—which is the same minimum age for purchasing and consuming tobacco and alcohol. Cannabis can be consumed in private residences, many outdoor public places like parks, designated smoking guest rooms like those in hotels, and residential vehicles and boats.

Additionally, those 19 years and older can possess a maximum of 30 grams of dried cannabis. The Ontario cannabis law explains that one gram of dried cannabis is equivalent to 5 grams of fresh flower, 15 grams of edible product, 70 grams of liquid product, 0.25 grams of concentrates (solid or liquid), or 1 cannabis plant seed.

All consumers of a legal age need to purchase their cannabis from licensed locations or face a fine of up to $100,000 and/or imprisonment for up to one year. If that’s not enough motivation to stick to legal avenues, then what is? Currently, the OCS is the only licensed place to purchase cannabis products online because they follow the strict rules put forth by the federal government. Other than that, consumers in Ontario need to purchase from private and licensed retail stores in-person.

Whether or not Ontario residents have been accurately self-reporting their legal cannabis purchases, the increase in revenue alone demonstrates a turning point for the province’s cannabis industry. With joint efforts from governments and constituents, the dangerous illicit cannabis market could well be on its way out for good.

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