Seven years ago, Canada legalized cannabis and told us the black market would collapse, but it hasn’t. By most estimates, illicit sales still account for somewhere between 35 and 45 percent of total cannabis consumed in this country. The legal market, for all its compliance frameworks and excise taxes and store caps, has not beaten the back-channel, not even close.
The question worth asking: is that actually surprising?
It shouldn’t be. This is working exactly as designed, just not for us.
In 2025, a policy decision handed down by people who don’t operate businesses on this block could have destroyed our business and gutted the very vibrance of this neighbourhood. The logic was the same logic governments always use: we know better, the community will adapt, it’s for the greater good. The people who bear the consequences of those decisions are never the ones making them.
Cannabis policy in Canada works the same way. The government built a legal framework that looks like industry support on paper but what it actually built was a compliance gauntlet that favours large, well-capitalized operators while making it nearly impossible for independent retailers to compete on price or against the person selling unlicensed product out of a Shopify store with no excise stamp.
The math isn’t complicated, legal cannabis carries excise tax. It carries packaging compliance costs. Mandatory testing, tracking, reporting and provincial mark ups. Every licensed retailer (and producers) absorbs those as a cost of doing business. The result is an industry that costs, on average, more than what’s been available through the same networks operating for decades.
Enforcement against the unlicensed market is, charitably, inconsistent and licensed independent retailers are the ones most exposed.
We can't cut corners or attempt to move fast and break things. We operate in full compliance while unlicensed competition operates in full daylight, sometimes on the same block.
I’m not arguing the illicit market will never shrink, I think it will, but it won’t happen because of policy.
It will only happen when consumers decide for it to happen, because they want to purchase product they know they can trust, knowing what brand they’re buying from and trusting the process that went into their favourite product. That how the money stays in the community and that’s what actually matters.
That’s the only lever that works, not the government’s. Yours.
When you see the “Ontario Authorized” sign in the window and you buy from a licensed retailer, you’re funding the operation that pays taxes back into your city. You’re funding the staff that learned the product and earned the certification. You’re making a choice to support the person who went through the compliance process because they believe in what they’re doing, not just the margin.
The black market will always have a price advantage as long as the legal market carries a compliance cost. That gap isn’t closing anytime soon but what can change is where you put your dollar, and what you decide that means.
Support the stores doing it right.