Quebec Update: Cannabis

Well, I’m back. After a stretch of semi-vacation I’d like to welcome you back to our semi regular look at the Quebec french language coverage in our speciality areas. Today I want to take a look at some articles in the cannabis sector and some moves in the social and economic areas in La Belle Province.

Value!

Le Journal de Montreal reports on the fact Quebec’s legal cannabis will be the least expensive in Canada. Quebec marijuana will cost $5.88/g vs. an average of $6.83/g nationwide. The northwest territories see the highest costs at $11.46/g

They have an interesting breakdown on costs across Canada, with the most expensive city is Toronto at $7.94/g and Quebec City & Montreal roughly $6 and $6.24 respectively. It will be very interesting to examine cross provincial cannabis commerce and see if there are issues paralleling the cigarette trade when there are such large price disparities.

 

Drugs are Bad, MMkay?

In order to keep the pearl-clutchers at bay, the Liberal government of Quebec is launching an extensive public information campaign on Cannabis. TVA reports the campaign will run until April 8, and is targeted to 18-34 year olds.

Nevermind the studies showing drops in cannabis usage already happening in this group, (it’s less cool to toke up when no one tells you not to) this campaign is all about optics, not reality. It’s a way to hold the moral high ground on the issue without you know, giving back the tax income or anything.

Every Time I Think I’m Out, They Pull Me Back In.

La Presse has a good piece on the fight to dislodge organized crime in the wake of cannabis legalization. The article says the RCMP expects it to take up to four years to get rid of the black market in cannabis as the market moves to a legal one.

One of the issues identified is the lack of legal supply – something we at Equity Guru are quite familiar with. Complicating things are the ‘erratic’ messages coming from US authorities. If organized crime is still involved in the supply chain it could cause complications in the legal export of product across the border.

The piece ends with a warning the black marketeers are regrouping and ready to fight to save their businesses. Turf wars over shrinking markets and desperate gangsters is a bad combo. As with prohibition, some will go legit, some will vanish and some will fight it out. 

If you can read this piece, I highly recommend you take the time to dive in. I think how the black market issue plays out could have a surprisingly outsize impact on the overall sector.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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