Most Canadian Provinces’ Online Cannabis Sales Will Be Government-Run

A dirty little secret of the Canadian cannabis industry is the size of its illegal, online black market. Many Canadians are getting their cannabis through online pharmacies that operate outside the law, websites that will be made essentially obsolete when recreational use goes into effect July 1, 2018.

These online pharmacies are likely to lose major market shares once online cannabis sales become legal. But of the ten Canadian provinces, only Manitoba has announced plans to let the private sector sell cannabis online.

“Licensed medical cannabis growers across the country have been telling provincial governments they have the capacity and expertise to run online sales directly to consumers,” Mike Hager and Carrie Tait write in the Globe and Mail. “So far, all provinces except Manitoba have opted for a public system of online sales meant to capture consumers.”

That is to say, only Manitoba will allow the private sector to sell cannabis online. (The Manitoba government will maintain a monopoly on wholesale supply, though retailers can set their own prices.)

Canada’s current black market for marijuana is estimated to be ten times the size of its legal marijuana market. It’s unclear how much of that black market is internet sales.

The province of Alberta announced its cannabis proposals on Nov. 16, allowing brick-and-mortar sales privately but running the online market itself. A similar measure is being debated in Quebec, and provinces like New Brunswick and Ontario intend for all sales to be state-run.

Other provinces like Nova Scotia and Saskatchewan have yet to announce their cannabis policies.  But more than half of provinces have, and most intend to keep online sales run by the province government.

"What other industry would you be given the right to retail, but not online?" Canadian Association of Medical Cannabis Dispensaries president Jeremy Jacob asked the Globe and Mail. "Unless [governments] can show that private businesses will not be able to do age verification, then it seems to me that there would be no clear reason for the provinces to reserve retail for themselves other than to gain the revenue."

Gaining the revenue may be precisely what those provinces have in mind. But some buyers may mistrust a government-run cannabis market, in addition to other inherent drawbacks of government-operated entities.

"It doesn't make sense to put that order in and wait for a week and a half to two weeks when I can call somebody and have them come to me,” noted Edmonton mother Skye Bergen.

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