Why illegal cannabis brands are trending

Published Apr 25, 2021 01:00 p.m. ET
iStock / RoschetzkyIstockPhoto

These days cannabis products are legal in several countries and many US states, still, somewhere around 80% of all pot-related sales come from the black market, a steady influx of unlicensed vendors who are skirting rules and regulations while still managing to impress customers, sometimes even on a global scale.

Memorable brands versus the competition

We know edibles product names like Euphoria Extractions or Nerds Rope, while very few could list similar legitimate competitors, a strange phenomenon that cannot be found in any other industry. Consumers in general typically recognize big-name brands better than the competition. Think companies like Smarties or Aero, both of which are made from the infamous Nestle, a corporation we all know quite well.

In comparison, brands like Mirage or Great Value, which both make chocolate that is eerily similar to those big names, are hardly known and barely memorable. We may be aware that they, as well as other competitors, exist, but we have very little memory of who might be responsible for the much cheaper and lesser advertised alternatives.

Why this is such a big problem

The cannabis industry is the only one that is having a tough time against unlicensed and illegitimate products, and if we don’t figure out how to fix this, then the black market will continue to thrive while legal participants who’ve poured everything into helping to develop a genuine regulated market could face the possibility of losing it all.

Licensed cannabis companies have a lot on the line right now, but they’re not the only ones at risk if we aren’t able to change this trend. Consumers who indulge in black-market pot products get no guarantees in any regard. They can’t rely on things like labels, consistency, or even the most basic of health practices which should be taken in the preparation of these high-priced goods.

The reasons why it’s happening

Euphoria Extractions and Nerds Rope are two major illegal competitors who’ve successfully made millions off consumers, but these brands are only so well-known because they’ve made headlines, as their delectable cannabis edibles keep ending up in the hands of young children after they are accidentally mistaken for their real non infused counterparts.

Some of the biggest trendy black-market brands can be found on various social media platforms, where self-proclaimed artisans show off photographs of their work while making direct connections with consumers. Though they might not be able to advertise using traditional methods such as Facebook ads, these methods of reaching out are working, and people are buying up the cute one-of-a-kind goods.

It’s so easy for both big black-market producers and consumers to connect in this way; meanwhile, legitimate providers are limited by strict advertising laws and restrictions that prohibit similar types of ads for legal cannabis products, and the unfairness doesn’t stop there. These artisan makers go all out to make a great first impression, with aesthetically appealing packaging, something else that’s banned on the legal scene.

On top of advertising woes and the inability to make such an incredible first impression with customers, legal participants face yet another barrier, and it’s that they can’t sell just any pot product. No, they have strict cannabinoid limits, especially when it comes to things like edibles, with countries like Canada enforcing a strict 10mg maximum. If a legitimate vendor's edibles only contain 10mg, but they cost the same as the black market 80mg or even 100mg alternative, it’s not hard to see why some choose the latter.

Now, you might think that unlicensed cannabis product producers will eventually get caught. After all, most legalization laws clearly prohibit most of what they do, but none of it seems to be enforced by the police. In fact, some have even made headlines after calling the police to assist in the collection of unpaid fees from customers. The same is true with a select few consumers who shopped online and then requested official police assistance to follow up on their unreceived product.

Though it is common to hear about the occasional large bust of cannabis plants being grown without official permits to do so, these incidents are few and far between, while next to nothing is done to address the hundreds, potentially thousands of illegal black market delivery drivers and websites. These businesses operate out in the open, often without a physical storefront, and no one seems to be doing anything about it.

What we could do to change this

The cannabis industry is still in its infancy which is good because that means there is still time to reverse some of the terrible decisions that have been made along the way throughout this awkward introduction to legalization. Luckily, there are several easy things we could do to level the playing field:

1. Strengthen enforcement
Our police are working hard, with long hours, while dealing with insanely demanding situations. It’s certainly no walk in the park, so it’s understandable that they don’t quite have enough time, energy, or resources to dedicate to unraveling these black-market chains. However, if we want to discourage unlicensed businesses from functioning altogether, then we will eventually need to see a much stricter level of enforcement.

2. Loosen regulations
Current regulations surrounding pot products in most countries are quite restrictive, heavily limiting things like potency or certain types of derivatives while claiming that it’s for the good of the people. The thing is that the people are still enjoying their preferred 500mg edibles. They just don’t have the option to support legal vendors if that’s what they want, which is why we need to change arbitrary and ineffective maximums that only stand in the way of successful pot companies.

3. Allow for advertising tactics that other substance producers already use
One of the biggest advantages afforded to the black market is the ability to advertise and sell products without scrutiny online. They can use witty sayings and even talk about how each product might make you feel while offering tips and tricks on how to have fun with it, all things that are banned for legitimate cannabis companies. Pot ads should be educational, but there is no good reason not to allow the industry enough leeway to have a bit of fun with it.

4. Remove monopolies within the industry
Right now, cannabis producers, brands, and dispensaries in Canada are struggling to compete where prices are concerned, and that’s because many provinces are maintaining control over the supply of green. One good example of this is in Ontario, where OCS is the only legal provider of pot products, which gives them the ability to keep prices as high as they like, cutting into profits for companies as well as potential savings for consumers.

5. Facilitate the transition of black-market companies to legal businesses
There are far more illegitimate cannabis companies, producers, and vendors than there are licensed ones, and this is supported by the near 80% of sales conducted on this side of the market. We could help to slowly sway this number the other way by facilitating the changes that are necessary for illicit participants to go legal. Of course, to make them willing, we’d need to allow them to carry similar products. Still, this one step alone could do wonders for the legal industry.

The changes won’t be immediate, but the wait will be worth it!

There is no way for us to fix this problem with the illegal scene overnight, as many different laws and regulations would need to change to make it happen. But if we choose to take action now, it would only be a matter of time before all green businesses are legal, licensed, law-abiding contributors to the cannabis market.

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