Legal cannabis sales in B.C. are some of the lowest in Canada. Why?

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WATCH: B.C. cannabis market lags behind most of Canada – Aug 27, 2019

British Columbia has long been considered the cannabis capital of Canada, but new numbers from Statistics Canada show that reputation is in jeopardy, at least when it comes to retail sales.

In the approximately nine months since cannabis has been legal in the country, B.C. has seen just $19.5 million in recreational pot sales.

Compare that to neighbouring (and comparatively populous) Alberta, where legal pot has racked up more than $123 million in sales since last October.

READ MORE: Alberta sees most money spent on cannabis since legalization: StatCan

Ontario sold $121 million in that period, while Quebec sold $119 million. Tiny Prince Edward Island was the only Canadian province to sell less than B.C., with $10.7 million in revenue.

So why is the province that’s legendary for “B.C. bud” so far at the bottom of the ladder?

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Those in the industry say there’s one driving factor: a lack of legal outlets.

While cannabis sales went live online in B.C. the day pot was legalized, there was just one legal store open on Oct. 17, a government-run outlet in Kamloops.

READ MORE: Plethora of pot? Canada could hit cannabis oversupply as early as 2019, depending on edibles

Since then, the provincial government has issued 62 licences for legal retail outlets.

Mike Babbins, co-owner of Vancouver’s first legal cannabis shop, Evergreen Cannabis Society, said the dearth of options has left customers sticking with the black market.

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“When we were the only store, we weren’t the only people in the city selling cannabis, there was lots of other options,” Babbins said.

“They’re starting to close now, and I think we’re up to 11 licences in the city, but we need a lot more than that. Probably 10 times as much as that to feed the city because we love cannabis.”

The City of Vancouver, which has been pursuing legal action against unlicensed dispensaries in the city since 2016, said Tuesday the number of rogue operators has been reduced to five outlets.

READ MORE: 20-year-old B.C. woman acquires cannabis shop licence

But the battle has been slow, and Babbins said it’s likely put a major dent in the province’s bottom line.

“There is a lot of illegal product out there and a lot of people who have been doing things a certain way for generations, and they don’t want to switch overnight,” he said.

It’s that entrenched black market on which Public Safety Minister Mike Farnworth partially pinned the sluggish sales.

“Part of the challenge is ensuring that the legal cannabis market in B.C. doesn’t have links [to] organized crime or people engaged in criminal activity,” said Farnworth, suggesting B.C.’s licensing regime needed to be more careful in screening applicants than other jurisdictions.
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“We are processing applications as fast as we can, we’ve looked at ways to improve the process.”

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Farnworth said stamping out the black market would take time, pointing to the example of Colorado, where he said it took four years to get the legal market share over 70 per cent.

He said the province’s new community safety unit is also now active across the province and has already shut down 36 illegal operations.

But Dan Sutton, CEO with cannabis grower Tantalus Labs, said it was a “bit of a cop-out” to pin B.C.’s low sales on the province’s fabled black market, noting that it was never hard to get illegal pot in Alberta, Ontario or Quebec.

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READ MORE: More BC Cannabis Stores planned to open this year, but none for Vancouver or Victoria

He asserted that what’s been different in B.C. is a lack of political will to lift the industry up.

“I question who are the political champions in the B.C. legislature who are really advocating for the strong growth of this industry as it exists today,” said Sutton.

“Some of these operators [with licence applications] have been waiting with leases, paying out of their own pocket for 11 months now. I think it’s really time we see a bit more political ambition towards getting these entrepreneurs into the game.”

From Babbins’ perspective, members of the public who support cannabis also need to apply pressure at the local level, letting their city councils know they want the product in their communities.

“Until people say, ‘Hey, we want stores in our neighbourhood’ … and start showing up and stop worrying about the stigma of using a completely legal, safe product, it’s going to be like this,” he said.

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“Alberta just opened the floodgates.”

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