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Comment by icepat | Hacker News Reader

A major reason for this is that the price point is hardly competitive with black market prices. The federal government was tasked with determining what going prices were on the street, and the data was ignored when crafting the price system. It's hard to dislodge an existing dealer-"client" relationship when you offer the same (or often lower quality) product at an inflated price. Then there's also the entire problem with the legal cap on edible strength.

This is a textbook example of a good idea, executed terribly.

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Cannabis at the store costs anywhere from $90 to $500 a oz, with $120-150 a oz being the average AA grade. The same prices for a "gray market" is typically around $30 to $90 range for a oz of AA grade. Most of the "gray market" cannabis is grown by private individuals or native reservations (which have exploded as nobody will police it). It is typically sold at a store on the native reservation or via mail to order websites.

Now in order for you to grow cannabis to sell to the store you have to meet a set of extremely strict criteria that range from a specific amount of acres to soil quality, to harvest techniques and warehousing. You can't grow plants over X height, need permissions from neighbouring property as flowering can be aromatic, you cannot spray or use any non-organic fertilizer, and you have to go through a series of reviews, which cost a lot of money. After that you can then grow cannabis which could be sold to a store. A store then takes that and puts it into extremely expensive special packaging that is child safe, keeps the cannabis hydrated to 65% and all kinds of stuff like that.

Now stores tend to promote CBC + THC combinations where you are balanced rather than extremes towards one or the other. As well as beverages which is where I assume they make their actual money. I have no idea what kind of up sale is the average, but you don't really make much off a few people buying 3g or 9g of cannabis in any format minus beverages. Since most of it is taxes anyway.

So you end up with a strong "gray market" that grows faster, and cheaper as there is no restrictions and they can spray and use what ever to grow the product faster. And they don't pay taxes.

It has nothing to do with any sort of "dealer client" relationship, I don't know a single person who calls up any "dealer" and gets cannabis. Everyone I know either goes to the store and buys it or gets it online mailed to them.

This is rather incorrect. In Canada I knew plenty of people who still had "their guy". You're also incorrect about this being a gray market, there exists a strong black market, and you can find articles about it to this day.

You can't have a "black market" on a product that is legal. It's called a "gray market". But that doesn't matter what it's called.

On my way to work I drive by several stores on native reservations that have giant $60oz signs on the highway. These are not legal stores, they are not allowed to sell like that, I live in a province that it's only allowed for sale in the provincial liquor store. Yet they exist and people walk in all the time. No police will touch it as it's nothing but a hassle. So what does that mean?

If a store can exist and sell and pay taxes, but it's not technically legal, is that not a gray market?

And that's fine I don't know a single person so it's my statement versus your statement.

The rest of what I said is true.

Your underlying logic is flawed. You can have a rifle, that's legal, but you can then sell a rifle outside the legal market to someone without a license. The rifle can be seized and sold on by the police.

The product is not illegal. But still you call that a blackmarket firearm. You call the market you sell it on, the blackmarket. A black market is one where the transactions are occurring contra to established legal frameworks. Gray market occurs when there's legal ambiguity (ie: research chemicals like LSD mimics that are sold for "soap making" when selling for consumption would be a crime).

I was under the impression if a store exists, sells a product, that store is technically illegal, and it is never shut down (has existed for years) that does murk the waters quite a bit between gray and black market. That's why I believe it's much closer to gray than black.

I adjusted the parent message to remove black market references. I agree with you.

I know HN generally discourages frivolous replies, but that was both a good and productive back and forth. Not something you get every day. Thanks!

It's not legal ambiguity. No taxes have been paid on it. It's black market.

Don’t know too much about the Canadian market but isn’t the convenience of not doing something illegal and it being easily accessible worth paying for. That’s why streaming service’s completely beat out piracy

The committed cannabis smokers don't want to spend the extra money, and the rest of us don't care about it enough to keep all these businesses alive.

I live near an ex-urb/suburb of about 20,000 people. There's about 5 Tim Hortons franchises, and I think about 7 cannabis retailers at last count. I strolled into one the other day, a saturday afternoon, and it was a ghost town. Not a person in sight. At least the Tim Hortons have a line-up of addicts at the drive-thru.

I suspect anybody who is serious about smoking the stuff either grows their own (you're permitted up to 4 plants, which is a lot really) or "has a guy."

I live rural, and I have neighbours on one side open-air growing a bunch of plants. Eagerly awaiting first frost, because right now it smells like a college dorm room outside.

Yeah. It’s a worn out political bullet point. The dispensaries are reasonably priced as long as you’re a smart shopper. A lot of the edibles are bad-tasting gimmicks at bizarre price points for how much THC they have. Just don’t buy the junk. I’m sent to the moon on 90 cents worth of THC capsule.

>That’s why streaming service’s completely beat out piracy

Are you sure about that?

Streaming is incredibly fragmented + the geolocation based limitations (certain shows are available in X country but not in Y, subtitles and dubbing varies a lot to) are increasingly prominent. Piracy will always triumph because of the ease of access and getting what you want in the format you want.

Music piracy is much harder today than it was 10 years ago. Your logic is consistent, but it doesn't match reality, which is that piracy is on the decline.

>Music piracy is much harder today than it was 10 years ago

What does "harder" mean? Just because what.cd doesn't exist anymore there are still countless trackers and servers out there. I can pretty much download anything I want week 1. There are more music out there that we could listen in our entire lives.

Of course someone always comes up with the question like "what about the tanzanian panflute world music band I've heard in Quito in 1982, where can I find their CD"

modern piracy is pretty easy and becomes cost effective fairly quickly once you start scaling.

but spotify is pretty good, doesn't require a lot of storage, and works on everything to include my phone and my linux desktop. my mom, my kid, and most people i know are able to use it, and "it just works". and spotify has few competitors.

tv and movie streaming, however, is fractured and miserable. there was a minute where a single netflix made it better, but for the month cost of 2 streaming services I could get sickbeard and NZDB and watch whatever i want. then there is the "what service is $show on?" game, which you don't have to worry about with streaming.

and then there is 'owning' -- if you keep your pirated content you have it. meanwhile netflix or hulu can lose the rights and you don't get to see that show again.

The stores close at 9pm and aren't very well located.

> That’s why streaming service’s completely beat out piracy

ime this is only true for the unwashed masses.

piracy has a trove of benefits, but you gotta know your way around the sharp edges.

That is absolutely false. Every single person on my team at work pirates instead of paying for the streaming services. At first, when it was just one or two services, I think people did pay, but as prices raised and the streaming services became fragmented, it was much easier to pirate.

Anecdotally, there are a fair number of new customers that are there because it's legal. This is especially true for edibles, despite the low THC, and the CBD oil/edible products.

I know several people who were avid smokers (even before cannabis was effectively decriminalization after Harper left office and people stopped caring) who still have "their guy" because it is "cheaper and better quality" than what they stores can legally sell.

> This is a textbook example of a good idea, executed terribly.

Partly this was due to the constraints imposed by the "reefer madness" crowd and partly due to the unexpected gold rush. Also, who would be surprised that people like Bill "Pot is Dangerous" Blair would botch a cannabis roll out. I kind of wish they would do a reset and rework the legislation now that people are less worried about it, but the current political climate makes that impossible.

> "Pot is Dangerous" Blair

Or "Cannabis is infinitely more harmful [than tobacco]" Harper. The cards have been stacked against legalisation's success since before most of us were alive.

The purpose of legalizing weed was for the government to collect taxes. Even if it was the same price as in the black market, it's going to be more expensive because of the additional taxes added to the final price.

This is why legalizing it was never going to work.

And that's why I still buy all my booze from the Chicago mob.

Did the government set prices as well as provide all the packaging? Or do you mean the taxes are so high that there’s no way for a business to break even without a total price substantially higher than the black market? Regardless it sounds fairly successful if 70% of the market is now legal.

I wonder how far off the Canada prices are from the California ones I’m familiar with.

Government does not set the prices, unless you live in one of the provinces which cannabis is only sold at the provincial liquor store.

The issue is the taxes are so high it's nearly impossible for a cannabis business to generate income while selling at a price point people will buy it at. You have to remember that generally most of Canada is on the poor side.

Ah yeah, by set prices I meant via tax levies. I should have been more clear. It does indirectly set prices, but you're correct they did not say "1 oz sour diesel is $10".

I don't partake myself, but I've heard that the major selling point in the US is that legal weed is generally of higher quality than what can be found on the street, even in California. Is that not the case in Canada?

It's arguable. First it will be grown professionally and not in someone's garage so you get some quality standards there. Then there's the enforcement of THC and CBD levels per price tag, which is something the street won't even bother measuring. There's also the strains: there's pretty good variety at official dispensaries, much more than your local dealer has - but it's all designed for occasional users or first timers for acquisition. Store employees also aren't allowed to recommend anything because effects may vary. So there's this whole attempt at making it like a liquor store (which are also nationalized, btw) but without the same... respect for the product or the user I'd say. Liquor stores have pseudo-sommeliers on staff and special origins and shit.

> It's arguable. First it will be grown professionally and not in someone's garage so you get some quality standards there.

I think the grey market channels are pretty much the same as the black market channels used to be: some are selling garbage and some of selling better quality than you can get in the legal shops.

In California and elsewhere in the states Fentanyl dusting / contamination of illegal drugs including cannabis is a very real and scary danger. Cartels try to dust in a tiny tiny amount to make their product hit harder and form a stronger addiction. But if they get it wrong, it will literally kill you. I am happy to pay a premium for a lab tested product with a legal chain of custody and no spooky additives. I imagine it would be the same in Canada, but also curious.

same in germany.

you have to get a prescription from a doctor, get registered (and leave a massive paper trail) and then pay the same or more as usual.

most consumers don't bother

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