Legal vs Blackmarket Cannabis

Let me preface this discussion by clarifying that, as a cannabis consumer for more than 30 years, this article is not to disrespect the amazing work of many craft growers and processors, as well as the first ‘dispensaries’ that paved the way for legal retailers. This article is to bring attention to the many misconceptions and misrepresentations of legacy market products in comparison to their legal counterparts, as well as terminology used to dissuade people from enjoying the legal market. We, at Triple J’s, look forward to the new co-ops of craft cannabis growers and small cannabis processors working together to get through Health Canada’s exhaustive, expensive, and restrictive licence application process to provide quality cannabis products.

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“Government Weed”

This term for legal market cannabis has been in use for many years and is entirely false. In no way, shape, or form does the government actually grow cannabis, nor do they put restrictions on the potency and quality of flower. The restrictions Health Canada puts on cannabis flower are in relation to protecting cannabis users from harmful products during the growing and processing stages, as well as purchasing limits, packaging, and promotion. The government does not set prices either, with the exception of GST. Pricing is set by LPs, provincial or territorial governments that have a wholesale distribution model, and retail stores.

This term can further be perceived as an insult to the many licenced producers (LPs) out there that absolutely love cannabis and cultivating cannabis. Of course, there are LPs that entered into the cannabis industry with only money in mind. They created massive grows and warehouses, and only produce generic, sub-par cannabis; however, there are also LPs that are only small grow and batches, and produce stellar, top-tier cannabis. Lumping all legal cannabis under this title is becoming tiresome for us in the legal space as it clearly demonstrates a fundamental lack of understanding of the legal market.

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“Black market is better quality”

While there are amazing craft growers out there who produce excellent quality cannabis from the black market, the legal space also has amazing flower available. Again, as a cannabis user for decades, I do know the difference between high and low quality cannabis, and can attest that there is some incredible cannabis in the legal market. With more craft growers entering the market this will only increase. The issue is that consumers in the black market have been misinformed for decades about cultivars and potency that have skewed the way people perceive cannabis. 

Unless one is purchasing directly from a grower, a street dealer can put any cultivar name and potency on flower. “Here is some 25% Skunk Haze!” – How do you know this? Was it lab tested for potency, or did you just smoke some? Were the seeds sourced from somewhere that genetically tested the seeds to ensure that is the cultivar, or did someone just tell you that? This has lead to the misconception that high THC indicates the best cannabis as it is based on falsities, including labeling it indica or sativa and mislabeling specific cultivars . Likely the cultivar was mid-teens in potency with a robust terpene profile.

While I do not like comparing cannabis to alcohol, since both are controlled substances sometimes it does help to do so. Typically, people do not enter a liquor store and ask for the highest percent alcohol, nor do people expect good quality wine (or beer and whiskey), to have a higher than average amount of alcohol compared to less expensive types. There will always be those that are happy with lower cost alcohol products, as well as the connoisseurs that will pay the extra amount for premium quality. This is the same with cannabis. Many are willing to pay the higher price for premium quality cannabis where they know exactly what cultivar they are getting, how it was grown and by whom, and what cannabinoid and terpene content the product has.

I must also touch on the short memories some seem to have. Thirty years ago and up until the mid-to-late 90s, it was buyer beware, and much of the cannabis available was ‘red hair’ or ‘shake’ with stems and seeds. It was rare to find some truly great ’skunk’ weed. There was no discussion on percent of THC, indica or sativa, and cultivar names - we just enjoyed what we got. We are now in a wonderland of cultivar variety.

More info here: 

https://www.linkedin.com/pulse/debunking-indica-vs-sativa-hybrid-myth-jeremy-jones/

https://www.linkedin.com/pulse/debunking-high-thc-myth-jeremy-jones/

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“Black market is cheaper”

It is difficult to deny that the black market is cheaper at this point in time. However, the legal market is coming to terms with this issue. There are now plenty of cannabis products at or below illicit market prices. Ounces under $200, one gram pre-rolled cannabis for under $10 each, and a wide variety of edible products are all becoming common. What many of the legal decriers don’t understand are the different tiers at which costs are added to a product.

First tier – LPs set a wholesale cost and a Manufacturer Suggested Retail Price (MSRP). This is based on many factors such as operational costs, the quality of the product, and an expected return on their efforts.

Second tier – wholesale distribution organizations have a markup price for warehousing and distribution. This cost includes covering things like shipping, ordering, warehousing, and staffing costs. This is a huge barrier for retailers to overcome if they want to set reasonable prices. For example, in BC, this mark up is 15%; however, in Yukon, this markup is ≈50%. This is a also barrier when retailers are restricted by an organization to what LPs and products they have access to.

Third tier – retailers then set their markup on products based on things like operational costs and expected profits. This is where patrons can distinguish between retailers that are in the cannabis business just for the money, or for the love of cannabis. If a store in Yukon with a 50% wholesale markup has comparable prices to a retailer in BC with only a 15% wholesale markup, one can see the retailer that is trying to keep cannabis accessible with reasonable prices, and the one that is more profit driven.

The key here though is going back to the previous ‘quality’ discussion. In a legal space, a consumer knows exactly what cultivar they are getting, the cannabinoid content, and any information on how it was grown and processed – and it is consistent.

Once again, I must remind those in Yukon about how prices were decades ago. We used to purchase 3 pinner joints for $10, 6 for $20, often filled with all kinds of filler crap besides cannabis; grams of the aforementioned ‘red hair’ for $20, quarters for $100 – if it was good ‘skunk’ weed, $25/g and $125/q. We are living in a great age of far cheaper cannabis, even at current legal market prices.

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“Stronger and better edibles”

This conversation must be started by how one calculates cannabinoid content in a basic home environment. The calculation is based on many assumptions throughout the process to come to a conclusion that is only a vague approximation. Many of our patrons are finding that the low dosage edibles that are in the legal market are far stronger than anticipated. First, we should go through the edible making process of the legacy market.

  1. Cannabinoid content – if you do not accurately know the cannabinoid content, through lab testing, of a cultivar, then you are guessing right off the bat. This means all subsequent calculations are incorrect.

  2. Decarboxylation – the process of activating the acidic forms of THCa and CBDa into the activated forms of THC and CBD. Again, unless one is accurately lab testing the decarboxylated cannabis for activated THC and CBD, you can not possibly know if all the THCa and CBDa has been activated. This adds to an increasingly miscalculated result if you do not know the initial cannabinoid content.

  3. Extraction – during the process of extracting the cannabinoids from the decarboxylated flower into an oil or butter there is another assumption that all the cannabinoid content is being extracted from the decarboxylated flower. At this point, the resulting number of activated cannabinoid in the extract is far less than if each step of the process was at a 0% loss.

  4. Mixing – does all the butter or oil have activated THC/CBD throughout? When you mixed the ingredients of the final product, was it thorough enough to ensure that every section is equal in dosage?

These miscalculations can be potentially harmful for someone using a product for recreational purpose, not to mention the potential serious contraindication issues for someone consuming edibles for medical purposes. In the legal market, typically, a THC or CBD isolate is used, testing is done throughout the process, and standards are required to be met to assure consistency of the product. Again, you know exactly what your are getting, every time. Also, who wants to eat a corner of a chocolate bar in case the dosage calculation was off? With the low dosages of legal edibles, one can more accurately gauge their dose and enjoy more of the edible product.

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“Better and more variety of concentrates”

I will be the first to admit that there is a lack of concentrates in the legal market, particularly products such as wax, budder, and hash. However, we are still in the early stages of legalization, even at 2 years we have not seen the end of the roll out of more concentrate products. 

We are seeing more liquid concentrates in pre-made and disposable pens and cartridges. Admittedly, this was an ethical dilemma for us at Triple J’s as we were concerned about the environmental impact of consumers just throwing these products into landfills. We were fortunate to hear about a company called Greentech who is willing to recycle these products for us and we signed up. We have also signed up with our Blue Box company to accept all our cannabis plastic and cardboard packaging for recycling.

With the recent vaping lung infections seen in the US it is clear that the unregulated concentrate industry is dangerous. Added flavouring, lack of testing, and no regulatory standards that are required to be met means that any concentrate has the potential to cause harm. In the legal space there are restrictions on what additives can be used in concentrates as well as the processes used to create them. As a result, Canada has seen no lung related illness tied to the legal concentrate market.

I have covered the topic of oils, specifically CBD oils, more in depth here: https://www.linkedin.com/pulse/cbd-myths-misconceptions-jeremy-jones/

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While I can understand many people’s frustration and faithlessness in a government run legal market, people must keep in mind that this is still a work in progress. Instead of being confrontational and unsupportive, perhaps it is best to work with the government to enact change. Here in Yukon, we at Triple J’s are working diligently with government representatives to try to enact that change at a legislative level. We are assisting in the development of policy and legislation to allow ecommerce and, potentially, delivery. We are also helping to develop a plan to potentially phase out the government wholesale distribution model, or a ‘through warehouse’ model where they don’t warehouse it and we can create orders with LPs, to reduce costs and have a wider availability of products.

It is important that we all work together with legislators to help guide them to best practices. The repeated response to the frustration of the strict legislation that was first enacted, from those legislators, is always along the lines of ‘It is easier to be strict and then loosen regulations, than it is to be loose and try to tighten legislation.’ This indicates that there is a willingness to enact change at a legislative level. Representatives at all levels of the cannabis industry: retail, distribution, processing, producing, as well as consumers, must continue to push the government for change and support the legal industry if we want a regulated and safe legal market going into the future. Continuous degradation of, and opposition to, the legal market is detrimental to that change.

Written by: Jeremy Jones

Guest User