Why Do So Many Cannabis Users Turn To Illicit Market? New Study Sheds Some Light

Some might expect that with the widespread acceptance of cannabis and its state-by-state legalization, illicit marijuana markets would be few and far between. But they'd be wrong. Whether here or in some parts of Canada, illicit markets not only exist but even thrive in some places.

Why?

A new report in the Journal of Studies on Alcohol and Drugs revealed that higher prices and inconvenience associated with legal sources could partly be why consumers seek out illegal providers.

Researchers at the University of Waterloo in Ontario studied data from the 2019 and 2020 International Cannabis Policy Study.

The Study

The survey, conducted among 16-to 65-year-olds, asked cannabis consumers in Canada and U.S. legal states why they still bought weed from illegal sources.

Canadians said that legal sources were more expensive. Over a third of those surveyed confirmed that for both years, the price differences were 27.3% in 2019 and 26.7% in 2020.

In the U.S., slightly less of those surveyed said the same - 27.3% in 2019 and 26.7% in 2020.

Convenience was high on the list as well with the percentage of respondents who highlighted these as reasons ranging from 10.6% to 19.8%.

"We also observed differences across jurisdictions and changes over time—many reasons decreased in later years, which reflects changes in the number of stores and the price of cannabis in Canada and U.S. states that have legalized adult cannabis use," said study co-author David Hammond, Ph.D., professor and university research chair at the University of Waterloo's School of Public Health Sciences.

Attempts To Displace Illegal Cannabis Market

Now that nonmedical cannabis legalization didn't fulfill the goal of displacing the illegal market, more research on the potential disconnect is needed.

"Cannabis legalization is one of the most notable substance use policies in several decades," Hammond said. "Transitioning consumers from illegal to legal retail sources is a primary goal of legalization. Indeed, many of the potential benefits of legalization—including product standards, revenue for legitimate businesses, and reducing the burden on the criminal justice system—depend upon shifting consumers to legal cannabis sources. Given the importance of this issue, there is surprisingly little empirical evidence on the factors that determine where consumers source their products in a legal market."

What's Next?

Researchers emphasized that with the market becoming more mature, the number of marijuana retail locations per capita would increase, making inconvenience less of a hurdle.

"Regulators will need to balance public health and criminal justice priorities in order to establish a competitive market for legal cannabis that encourages legal purchasing," the researchers said.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CannabisNewsEducationMarketsGeneralcannabis salesDavid Hammondillicit marketLegalizationmarijuana use
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Top Cannabis Event In New Jersey

Join the Benzinga Cannabis Market Spotlight in New Jersey on June 17th! Grow your business, raise money and capitalize on the booming NJ recreational market. Don’t miss this must-attend event in New Brunswick. Secure your tickets now. Very few spots are left. Use the code "JAVIER20" for 20% off!


Loading...