Jordan: Today’s story is about the worst drug dealers in the world.
News Clip: The crown Corporation in Ontario that sells cannabis in this province and Ontario said that it actually lost. Money believe it or not with the Ontario cannabis or 42 million dollars, which I’m sure some taxpayers are kind of scratching their heads about kind of wanting to know what exactly is going on
Jordan: Last week marked one full year of legal cannabis in Canada.
And with that came some changes to the. And that’s a good thing too. Because right now in the largest Province and the largest city in the country, all the legal pot in the world isn’t managing to convince Canadians to give up their friendly neighborhood weed guy. Why has the black market persisted in Ontario?
And in other places around the country it turns out shockingly. That there is no industry that government cannot mummify with red tape even one that should be the biggest moneymaker in decades. So can they fix it? And can they turn a profit? It will depend on our lawmakers ability to react quickly to Industry Trends and innovate in a rapidly evolving Marketplace.
I know doesn’t sound incredibly likely but there is always hope and soon there will be hope and cannabis infused beer. I’m Jordan Heath Rawlings. This is the big story Adrian Ghobrial is a reporter with CityNews in Toronto. And he has been on the we’d beat for quite some time now. Hi, Adrienne.
Adrian: Happy canniversary.
Jordan: Oh, yeah. That’s what we’re calling it.
Adrian: Now some are calling it that
Jordan: So a year after we legalized pot. How far have we come?
Adrian: We’ve come a certain distance. I think we have a lot farther to go you’ll speak with some of the companies, you know, the big the canopy growth. The Tweeds of the world and they say listen, you know, it’s been one year, you know, there’s going to be growing pains. We’re going to get it right this is going to work.
But then you look at some of the numbers on the flip side, especially when it comes to the black market which we’ve discussed and they’re not very promising numbers
Jordan: And correct me if I’m getting this wrong because it did seem unbelievable the Ontario government lost money selling pot.
Adrian: The worst drug dealers in the world. I don’t know how it’s possible unless you’re smoking your own Supply which we. That’s one of the rules not doing supposed to get high off your own Supply.
Jordan: So what happened? How do you how did how did happen
Adrian: You look at Growing Pains? I don’t have all of their data in front of me, but the rollout has been difficult getting distribution has been difficult getting stock.
You know, it’s difficult, you know, it’s called weed but it’s not as easy as growing weeds in your backyard there. It’s kind of a technical thing to do. Mmm and getting the right types of Growers the right amount of Growers to get the amount of product that needs to be out there. It’s tough
Jordan: Is demand outstripping Supply right now
Adrian: A hundred percent in both the black market and in the legal, you know Market again, the big companies will say they’re they’re figuring out the supply issues.
Though it’s still an issue. You know, you’ll talk to guys on the black market who have told me that they’re looking for Growers across the country because they’ve got more people banging down their door than they have weed in the bag s to sell them and it’s the same thing in the government-sanctioned stores.
You’ll walk into a nice glitzy downtown store. That’s got all these different all these different selection than when he started asking about. Hey, can I have this type of weed or that type of weed a lot of the times they don’t actually have it in stock.
Jordan: How do you fix that? I mean, is it just a matter of ramping up the industry on the growth side?
Adrian: I think so, you know, it’s multi-pronged. I think there is you know, it takes you know to get a harvest it takes certain amount of months to get your plants to harvest and then turn that Harvest over again and again and again and so getting that up I think is difficult. I think that they didn’t understand the demands that were coming what they legalized marijuana
Jordan: Still seems a little inexplicable
Adrian: Definitely. So there’s that and then you know, I’ve spoken as well with with some lawyers who represented some of the master growers in this country guys that were growing a lot of them for medicinal purposes for many years, but through the decades growing medicinal marijuana, they got caught up in charges and these guys know how to grow weed and grow a lot of it, but they can’t work for these big companies.
Because they still have these charges and again going back to marijuana not really being an easy thing to grow and cultivate, you know in large quantities. It’s tough, you know, you got scientists in there trying to figure it out, but you need some of these Master growers in there and a lot of them right now their hands are tied.
Jordan: So they’re not allowed to work in the industry because they’ve been charged working in the black market
Adrian: Exactly
Jordan: The last time we talked, It was about an illegal dispensary that the government couldn’t seem to shut down which I believe has now been shut down what we
Adrian: Fingers crossed for if you’re if you’re with the authorities who have been putting blocks up in front of it.
Jordan: Yes. Does that is that representative of the difficulty of shutting down the black market? And I mean you mentioned that it’s still eating into the potential profits for the government. Where are we
Adrian: I think it is. I think it’s a perfect example of the difficulties, you know, we know the most recent stats can numbers show that more than 40 percent of individuals are still buying some of their marijuana from the black market.
Shutting down the dispensaries has been a challenge for municipality like Toronto and elsewhere in the GTA. But you know getting those those basements, you know, neighborhood drug dealers, you know cut out of the market has been has been an issue as well. And if you talk to some of the top marketing Minds in the country, they’ll tell you that you need you know, the this perfect mix when it comes between distribution.
And it comes to prices those two need to be in sync and if they’re not in sync then inevitably what you’re going to do is push people towards the black market and that’s still what’s happening today.
Jordan: So, how are they not in sync?
Adrian: Let’s look at distribution for example, and the province of Ontario ballpark. I think it’s around 11 million people. We have 24 stores open right now. Look at Alberta. They’ve got just over four million and they have 300 stores. So. Distribution wise we can we’ve heard about the demand we’ve heard about the issues getting products to Market and in the province of Ontario, and when you only have 24 stores for that many people now, of course 11 million people in smoking weed in the province, but there’s a lot of people that are a lot of people that want to get their hands on it.
It’s just not available. It’s not readily available, you know, if you’re coming from. Certain municipalities who have decided not to allow marijuana shops, then you know people might come to Toronto on the weekend. They might go to Yonge Dundas Square they might pop into a store like Tokyo smoke and it’s a novelty and they get a couple grams and they off the go but that’s not that’s not supplying the demand that’s in the markets not building a habit.
No, and they need to obviously open up more stores. I think you can say that very easily. Now.
Jordan: How does it compare to the number of. LCBO stores in Ontario
Adrian: great example, you know there’s more than 600 LCBO’s and that’s not even including I believe some of the the grocery stores are now selling beer and some of the smaller stores like an in small rural areas that do, you know convenience stores that also sell their Wine and Liquor as well. So, you know, we’ve got 24 marijuana stores and more than 600 LCBO stores.
Jordan: This is a little bit maybe straying off topic. But why does it seem as though there’s this huge push to put more and and it’s come from the provincial government to put beer and wine and more grocery stores and even expanded into convenience stores while at the same time limit the number of marijuana stores.
Adrian: That’s a great question. I don’t have the answer. I’ll say maybe this there’s still I believe a stigma attached to cannabis to marijuana products that that isn’t attached to to booze, you know prohibition when it comes to to liquor it’s decades ago, you know, it’s readily accepted. By and large, whereas they’re still kind of got one toe in the water when it comes to weed and you know while we have provincial government in ontario that likes to cut the red tape or say they’re cutting the red tape and you know break down, you know, the amount of government involved in things there still seems to be a lot of government involved in getting stores opened in the quality.
Jordan: How quickly is that changing?
Adrian: Not quickly enough if you talk to the major suppliers and to the people out there that are want to get their hands on cannabis products. Right and when we talk about that that in sync that that marketing sink that needs to happen. The other equation is the dollars and cents in the price of Marijuana, which also isn’t in sync. Still on average across the country a gram of marijuana on the black market is about four dollars cheaper give or take then if you were to walk into a government-sanctioned store.
Jordan: That’s a huge difference because what are we talking about the difference between like eight and twelve bucks
Adrian: sure and it adds up right now if you’re buying more and more for sure it can add up and so at the same time you’re trying to break, you know market trends you’re trying to break people’s habits. Mmm and pull them in something that no matter what you’re selling is tough to do if people are dead set and their decade old ways here. We’re looking at a commodity that people for decades have gone.
To you know, their neighborhood dealers basement some of them have relationships. Maybe you know, it’s a way to get away from the kids, you know for for an hour and go sit down with your dealer you’ve had for four years and smoke a joint and you enjoy that experience here. They’re actually trying to get that person to stop doing that right and walk into a store.
So again speaking with with some marketers in the country. They say listen the government and these in these these stores. They can’t just meet the price of. The illegal Market they have to beat the price and right now they’re not even close.
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What are they doing? What is changing with the way pot is sold in Canada after a year?
Adrian: Well, heck it’s being sold you can walk into a store and you can get it. There are there are provinces like we’ve mentioned Alberta where there’s a lot less, you know stipulations around getting stores right opened up and where people can get out and get it
Jordan: what kind of incentives are like you are so you. The legal stores and talk to the people who run them. What are they? What are they doing? What’s different about that and better than a dealers basement? That would maybe encourage someone to go legal?
Adrian: Well, I think if you walk into some of the the government-sanctioned shops, it’s a bit of a. You know curated experience for the Cannabis user you walk in you’re greeted.
You know, most of these stores are well-staffed. You’re greeted you get an explainer on what a certain strain of cannabis might do how it might impact you how it might help you. Maybe you’re not looking to get high. Maybe you want something that’s going to. Help with your joint pains and you’re looking for CBD oil right?
You’re getting a you are getting a what what he’s more of a curated, you know experience out in the legal Market opposed to what might be a less knowledgeable CD Market on the black side of things, you know that can be argued either way. I’m sure. There’s some pot dealers that say well, you can’t beat the experience of coming over to my house and kicking your feet up on the couch and enjoying yourself, but you aren’t you are getting it too slick civilized experience a lot of the time when you’re walking in the stores, but unfortunately you’re paying for.
And eventually the dollars and cents, you know, some people there’s a there’s a percentage of the population that are okay spending a little bit more money and there’s a lot of people who would if they get a cheaper. I’ll get a cheaper
Jordan: part of the way the government is perhaps hoping to change this as by evolving the kinds of things that they offer for year to. So how how are those regulations changing
Adrian: Edibles edibles? It’s changing. It’s going to change pretty rapidly once they start to get the product on the shelves. So as of right now technically edible products are legal, but really what’s happened is there’s a 60-day grace period from about last week for companies to start Manufacturing. Edible products
Jordan: So they couldn’t even make them until they became legal
Adrian: Legally. Yeah, I’m sure there’s been some Willow Willy Wonka’s of the weed world who have been concocting some interesting things and there’s lots of illegal Edibles on the market right now. But yeah for for the big players to get their product legally into the shops, they can now start manufacturing them.
And I know certain shops in anticipation of this in the greater Toronto area. And in other markets across the country are doubling the footprint of their stores in anticipation of the edible Market hitting the shelves because it’s going to be that much more of a an experience as can be that much more product for people to purchase when they walk in.
It’s not just Edibles that are are going to be legal. They were expecting it. They can start hitting the shelves basically across the country by about mid December. So it’s not just Edibles. It’s topical creams. It is drinks, which we can talk about as a natural Evolution for a lot of cannabis products and as well as Vapes,
Jordan: What are cannabis drinks?
Adrian: Cannabis drink, you know, it’s cannabis infused beverages whereas, you know, there was some you know hemp beers on the market over the you know the past few years and
Jordan: I’ve had Hogtown happy. It’s tasty.
Adrian: Mixed reviews,
Jordan: Man.
Adrian: Listen not slamming it. It was what it was and if you enjoyed the taste and all the power to you.
But it didn’t get you high. It was just a a beer made with you know with hemp perhaps than barley and whatever sure now, you know, you’re there are big beer players that are getting ready to roll out, you know, they’re not they’re not sponsoring the show. So we’ll leave their names out of it, but right but but maybe could yeah.
Yes that that are there’s some big major players in the beer game that are putting cannabis beers over the mark. That then you’re going to they’re going to have you know, you’re going to have a reaction to the you’re going to get high in one way shape or form from drinking these beers. There’s going to be different drinks interestingly enough taking it one step further canopy growth, which we’ve mentioned one of the biggest players in the Cannabis game here in Canada has just bought a major stake in BIO steel.
Which is a an energy
Jordan: The energy drink that the hockey players drink.
Adrian: Yeah. Yeah the pink drink right right drink the pink and now speaking with some of the staff over there. They’ve been kind of, you know, tight-lipped about a lot of it. I can imagine the NHL hasn’t you know sanctioned CBD. Which is kind of a which is a you know, an additive in marijuana products.
It does necessarily get you high but can can help with pain reduction. Right? But some believe has some properties that can help you heal quicker certain things like that. So that’s probably what the I’m gonna guess that they want to put into the pile still drinks the NHL has a. Doesn’t allow its players to take CBD yet though.
Those discussions are happening MLB NFL all these discussions are happening. And so that could be a big play down the road but taking it one step back when we look at the drinks. This is what we’re going to be seeing. We’re going to be seeing fruity tasty drinks with different THC CBD mixes and concoctions and Cocktails you’re going to have alcoholic beverages with cannabis products and when it comes to the Edibles in the sweets, you’re going to have.
You know an array specially in the in the province, you know, the stipulations are that they can’t appeal to two children. It has to be, you know, very plain packaging and has to be childproof. But what can be in there is they can’t have gummies they can have they can have sour
Jordan: okay. They just can’t be packaged that they can’t be package. That way.
Adrian: You can’t, you know, you know when you go to the movies and eat your pack of sour kids or your go to the convenience store. I can’t look like that right but inside it can be. Which maybe takes us to one of our next point which is some concerns for parents.
Jordan: What are those concerns?
Adrian: Well, I think it’s inevitable that at some point Little Johnny or Little Sally is going to get her hands on their parents or their older siblings edible cannabis product that they purchased legally through the government or through a legal store and they’re going to have an adverse reaction to it.
And that’s it. That’s a real concern for parents and a valid one. It might not say sour kids on the package, but it’s going to look like candy. It’s going to smell like candy. It might even taste like candy a lot of the time right? And so there’s some concerns there. I was talking with a professor recently now, he’s a university Professor, but he’s like man, I’m an educator.
And if I’m teaching a high school classroom, he’s like I’m freaking out right now because you know in years past were maybe a handful of kids at lunchtime might go to the football field or off school property and smoke a joint and come back and fail their English test now in the classroom kids can be passing around gummy bears and I don’t have a clue and it’s just that much more readily available.
Jordan: It’s interesting that there’s two parts to this discussion. We’re having because on one side were talking about. The government not being able to keep up with the black market in terms of just providing the basic weed at a basic price point. So what they are doing is opening the door for Beverages and gummies. All of these kinds of things are those two are those two things in competition given that the government’s supposed to be regulating the stuff to protect children in the scenario. You just described yet. Also, it’s kind of their competitive advantage.
Adrian: I think they are competing against each other and they’re going to the government’s going to have to be really careful, you know about about how this is rolled out similar to how we’ve seen the first year with cannabis products, you know, mainly oils and combustible weed, you know flower as they call it.
There’s going to be growing pains when it comes to to edible products and you know, they are trying to limit the amount of THC. In you know from Edibles to two drinks to topicals to Vapes. So yeah, they are they are competing though. Yeah, it is as well in their interest to get these out there because there’s money to be made.
Jordan: Right. And again, I’m playing dumb here, but I can’t see the government being able to sell weed cheaper than somebody who is just selling it out of his basement with no overhead. So but what they can do is offer me this huge array of products that all look tasty and inviting and to your point earlier are well curated by a knowledgeable staff and all that kind of stuff. But that means that they have to like really push in that direction.
Adrian: For sure and and again that you know, there are Edibles already on the market illegal Edibles already on the market being made and so they need to find that price point as well that sweet spot that that speaks to what they’re doing.
They’ll perhaps people will be more inclined to buy the right of oils from a licensed government retailer because they know exactly it’s written on the package exactly. What’s in there. Time will tell you know, but it’s going to be interesting to watch it roll out.
Jordan: What are you going to be looking for when this stuff hits the market over the next few months.
Adrian: I think you’re going to be watching to see how you know, what stories pop up when it comes to the public consuming these products and if issues arise policing it’s going to be difficult, you know from from the business side of it. It’s going to be interested to see it is a bit of a horse race right now.
Between these big companies that are concocting all these crazy. You know gummy bears and drinks and whatever in their labs to see who has the Competitive Edge and who comes out ahead here. There’s a lot of money at stake and some of the companies have, you know, kind of whispered a little bit of what they have planned, but they haven’t rolled out their full catalog yet because everyone. You know playing really Coy right now, they’re going to have little media events and I’ve been told that some staff, you know, they’re having little tastings to knowledge get their staff knowledgeable about what they’re going to be rolling out interest. It’s almost like working at a restaurant and have like a meal tasting.
So those those are some of the things I think that are going to be really interesting things you’re going to want to watch and then you know, we’ve mentioned that you know Vapes will now officially be legal. We’ve heard some concerns right since in recent weeks. With some diseases and some infections when it comes to fungus in the lungs and a lot of these people have reported using marijuana Vape products and concerns that whether it be pesticides in the oils or what not has been making young people and a lot of people across North America say. So how do you combat that and
Jordan: We’ll talk to you in a few months and see if if our governments turning a profit?
Adrian: We’ll see.
Jordan: Thanks Adrian.
Adrian: Thank you.
Jordan: Adrian Ghobrial reporter with city news. That was the big story for more from us. You can head to the big story podcast dot ca where there are now two consecutive episodes not featuring Federal politics. You can also talk to us at the big story fpn. Do you still use your neighborhood weed guy? We want to know and finally this podcast and all the others on frequency podcast Network are available at frequency podcast network.com. Yes, but also in all of your favorite podcast applications. Thanks for listening. I’m Jordan Heath Rawlings. We’ll talk tomorrow.
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