High Times In Sunny Vancouver.
In this picturesque, multicultural port city, a mere three - hour drive from Seattle, cannabis seems to have embedded itself into this laid-back population as a recreational drug as well as a state of mind.
Talking to a few young professionals, they seem to have no problem in having a ‘toke’ before work, spending days whizzing down the nearby ski slopes stoned, or sitting around chatting about the merits of “BC Bud” as if discussing fine wine.
When Canada legalized marijuana in 2018, one of the central government’s aims was to shut down the thousands of illegal dispensaries and black market growers dotted around the country. However, converting an illegal industry into a regulated one, estimated at 5.3 billion Canadian dollars, has proved to be a little daunting.
Illegal marijuana dispensaries in Vancouver outnumber the government-approved legal dispensaries, and there are more of them than there are Starbucks outlets! One of the most popular ‘illegal’ stores is Weeds, Glass & Gifts. It’s a relaxed space (surprise, surprise) reminiscent of a favourite coffee shop, only here, jovial “budtenders” offer all manner of edibles or smokables to a steady stream of customers.
The Canadian government faces an uphill battle in stamping out these illegal retailers. For one, it seems that there are too many black market shops for the government to keep track of and, when one is closed down, another pops up on the same street. As someone put it to me, “ Asking the government to manage a thriving cannabis industry is like asking a farm labourer to build a rocket ship.”
In the lead up to full legalization, the newly created industry created a “green rush”, and the production and distribution, managed by government and licenced growers, went into overdrive. Stock prices soared, millions of dollars were staked, which doubled and tripled in an atmosphere reminiscent of the 90’s dotcom boom or the Yukon gold rush. This time around, though, the gold was green, but within a year, poor planning and execution meant that, all too soon, things started to fall apart.
The main problem was access to the product. Too few retail shops could open as the bureaucratic red tape meant that granting licences and conducting background checks took months.
A significant dose of disappointment has replaced the early euphoria in the cannabis stock market. All cannabis stocks have tanked, with an average 50% wipe-out in value in the last year. Major players such as Aurora Cannabis took the biggest hit, with its shares falling from US$12.83 in March 2019 to US$2 today. Another bud behemoth, Tilray, has also had its share price slashed by 80%, from over US$81 to US$16 within a year.
Meanwhile, though, a thriving new market was waiting.
When the legal product was available, consumers discovered that the price was almost double that of the illegal market. Licenced dealers now had to deal with new overheads such as sky-high rents for retail space on the high streets. Also, new players struggled with tax compliance and complex government regulations regarding fungicide and pesticide residue levels, and draconian security requirements for the vast grow sites. As the sluggish provincial bureaucracies grappled to come to grips with managing a new regulatory system, it seems the wheels fell off.
A license to operate legally is almost impossible to obtain and, when they are, they start from a staggering $30,000. This hiatus is a boon for illegal sellers, and consequently, they continue to defy the law knowing full well that police and the public have little appetite for a national crackdown. Given that just 29% of cannabis users buy their product from a legal source while four in 10 still purchase their cannabis from their regular dealer, this sector of the market will be around for some time to come.
It’s obvious, really; why would anyone drive a few miles up the road to score bad weed from a government shop when your black-market dealer, who lives virtually next door, has a better product and, what’s more, will deliver it to your door for half the price?
Vancouver’s medical patients – the very people whose decades-long activism had finally triumphed, now face cannabis shortages and massive price increases. Suppliers began diverting their medical supplies to the new recreational market, leaving hundreds of smaller dealers of medical marijuana in the lurch.
So, with few shops to sell to and customers clinging to their traditional dealers, the new cannabis corporations have found themselves holding a glut of product. According to official government inventory figures, there is a stockpile of grass weighing in at 900 tonnes at last count.
The rollout of retail shops was left, in many cases, to inexperienced officials in provincial government departments, who didn’t trust private organizations to run cannabis shops. “We will manage it”, said the government. But after squandering $80 million trying to figure out how to do it, got nowhere building extensive, shiny facilities that cost on average C$30m. Suddenly, they had loads of cannabis and nowhere to sell it because there weren’t any stores. Eventually, they had to invite private tenders to do the job correctly.
By 2019, more than 5.1 million people nationally, or 16.8% of Canadians aged 15 or older, reported using cannabis. This was higher than the 14.9% (4.5 million) reporting use before legalization. And so, two years on from legalization, cannabis has become part of the retail and social landscape, and the city has not crumbled into dust. Law and order have not been challenged, and Vancouverites go about their daily lives as they did before.
For decades cannabis has been the mark of the rebel, the outsider, the outlaw and now, with legalization, parts of their countercultural identity have been altered forever. Canada has made cannabis boring –, and that was kind of the point.
Vancouver, Canada, April 2021
