Marijuana Legalization: Canada is Going Free Market On Weed


"America's hat" is making big changes to the legal marijuana industry. The Conservative Canadian government is replacing its previous system of growing and producing weed with a "$1.3-billion free market in medical marijuana on Tuesday." According to an article on CBC News, the new free market system will provide "450,000 Canadians with quality weed." The previous system relied heavily on "homegrown medical marijuana," resulting in an inconsistent quality of products. For those who stand to reap the medical benefits of marijuana, a lesser quality product is undoubtedly an issue.

Under the new system, health inspectors will produce a standardized product in "large indoor marijuana farms," which will then be priced according to the market. Unsurprisingly this will spark a rise in prices, making it more expensive for those in need. The old system only allowed 4,200 growers to have two customers each. The new system will have more, standardized-quality weed, but this could drive more people in search of better weed to the informal sector of the marijuana industry: the black market.

Health Canada, the federal department of health, is not putting a cap on the number of these indoor weed farms. Already, 156 firms have applied for distributor and producer status. Without a doubt, this new system, which is expected to produce $1.3 billion in revenue by 2024, will provide jobs and a steady income for those who are struggling. However, it will also ban in-house growing operations. 4,200 growers will be shut down and out of business, including medical marijuana users who grow this remedy in the privacy of their homes.

The cost of weed is expected to be an average of $7.60 a gram by next year. Up until Tuesday, Health Canada has been selling marijuana at a lower $5.00 rate. Sophie Galarneau, a senior official at Health Canada, told CBC News that competition within the free market should drive the prices down in the future. But as of right now the rise in prices will likely drive more customers to the black market for better quality weed for a lower price. It would be naive to think this move will completely wipe out private growing, and it will likely strengthen the black market.