As cannabis legalization continues to make waves in North America, a recent study sheds light on strategies to combat the illicit market for cannabis. With Canada and numerous US states legalizing recreational cannabis, the battle against illegal sales remains a crucial issue highlighted in the federal government’s final report on the Cannabis Act.
The study, conducted by researchers including a member from McGill University, delves into the possibility of legal cannabis competing with the black market and outlines a roadmap for policymakers. Published in the Journal of Economic Behavior & Organization, the research analyzes supply dynamics and consumer behaviors to provide insights.
Key findings from the study indicate that while legalization can reduce criminal activities, it also leads to an increase in consumption. However, adjusting the legal price can help counter this surge, as consumers are sensitive to price changes. Additionally, enhancing the legal market with better quality products and implementing stricter measures against illegal sellers can effectively guide consumers towards legal sources, as suggested by the research team that includes scholars from City, University of London and the Toulouse School of Economics.
Tiffanie Perrault, a postdoctoral researcher at McGill University and co-author of the study, emphasizes the importance of a balanced approach that includes offering high-quality legal cannabis at competitive prices and enforcing laws against the illegal market. This approach aims to maximize benefits for consumers, minimize enforcement costs, and reduce the negative impacts of illegal cannabis trade.
As more countries contemplate cannabis legalization, the study underscores the significance of evidence-based strategies that prioritize consumer safety and public health while addressing the challenges posed by the underground market.
For further information, the study titled ‘Weeding out the dealers? The economics of cannabis legalization’ published in the Journal of Economic Behavior & Organization in 2023 can be referenced for detailed insights.
