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Mishandling B.C.’s wholesale weed monopoly could spark black market: Criminologist

Some unanswered questions on BC government’s recreational pot plan
WATCH: Some unanswered questions on BC government’s recreational pot plan

An SFU criminologist is warning that B.C.’s plans for recreational pot sales could potentially spark up a black market.

The provincial government announced on Tuesday that the Liquor Distribution Branch (LDB) will have a monopoly on wholesale pot destined for the non-medical market.

LISTEN: Province unveils preliminary plans for legal marijuana

Neil Boyd has been studying the market for B.C. bud for decades, and said the province’s approach carries risks if it limits the variety of products that are made available.

“The reality is, if there is not sufficient choice for consumers, that’s just going to incentivize the black market,” Boyd said.

READ MORE: Will new pot rules rein in rogue dispensaries? Vancouver city councillors split

“If the government takes the approach that it should limit the number of options for consumers, than we’re back into a black market scenario.”

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Boyd said a key factor will likely be how many strains of cannabis make it to retailers shelves through the province’s wholesale monopoly.

WATCH: Province releases early plans for legalized marijuana

Province releases early plans for legalized marijuana
Province releases early plans for legalized marijuana

But with more than 70 licensed producers already in operation in Canada, Boyd said the government shouldn’t have a problem catering to pot users.

Speaking to reporters on Tuesday, Public Safety Minister Mike Farnworth said the province was attuned to concerns surrounding the black market.

READ MORE: Almost half of Canadians want to delay pot legalization: poll

While the details of an eventual retail distribution model are still being developed, Farnworth said he was confident it would be sufficient to snuff out illegal sales.

“Anybody operating within that retail framework will be abiding by the laws of Canada, and the laws of British Columbia, and selling only legal product.”

While the province has said that retail sales would be permitted by a mixture of public and private outlets, it remains unclear whether the province is open to folding existing dispensaries into the new regime.

WATCH: $1 Excise tax on every gram of Marijuana is upsetting medical cannabis producers and users.

$1 Excise tax on every gram of Marijuana is upsetting medical cannabis producers and users.
$1 Excise tax on every gram of Marijuana is upsetting medical cannabis producers and users.

Another concern when it comes to the black market relates to the eventual final sale price of cannabis.

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The plan unveiled by the NDP on Tuesday contained no details on a pricing model, or whether the province would seek to mark up marijuana through the LDB the way it does with alcohol.

However the federal government has said it would add a $1-per-gram excise tax on recreational marijuana.

READ MORE: Legalized marijuana taxes must be set low to deter black market: study

A report by the C.D Howe Institute released in April suggested that a applying only GST and PST to legal pot would stamp out about 90 per cent of the black market, but that a $1-per-gram increase could result in fully half of the marijuana market being unregulated.

The federal government plans to table legislation legalizing marijuana by July, 2018.