WATERLOO REGION — Offering marijuana for a fraction of the price, edible products and faster delivery, black market businesses are competing head to head with Ontario's government-run online cannabis store.

These illegal outfits have exploited delays that have plagued the Ontario Cannabis Store (OCS) since legalization of recreational marijuana arrived on Oct. 17, offering a more convenient and affordable alternative.

To lure customers, some illicit websites are selling marijuana for as little as $3 a gram — almost a quarter the price of the legal cannabis being sold by the OCS.

Others are promising discreet, expedited delivery within 48 hours, much faster than the government service that in some cases has taken two weeks to process orders. And it's all tax-free, and without the privacy concerns of being on a government database.

Some medicinal users with legal prescriptions say they've turned to these illegal online sellers because licensed producers are running short on medicinal marijuana.

"All of this compounds to create a situation where people feel that they have to go to the black market," said Peter Thurley, a Kitchener-based board member with Canadians for Fair Access to Medical Marijuana.

"I'm partly using the black market myself, simply because it's not affordable to get all my medicine from the legal market."

Police across Canada say they are focusing their efforts on cracking down on the country's illicit marijuana industry post-legalization. But early indications suggest they've got their work cut out for them as the black market increasingly moves to a new business model.

Waterloo Regional Police did not respond to interview requests for this story.

The illicit market has been shifting to online mail-orders because of police pressure on storefront dispensaries, experts say. Many are using use payment options like Interac e-transfers, Bitcoin and money orders that are more difficult to trace.

"Dispensary owners have already largely shifted to the mail-order online market for their customers," Thurley said. "Dispensaries are more like loss leaders to get product loyalty more than anything else."

Retail dispensaries will remain illegal in Ontario until next April, at which point stores that are provincially licensed may open — provided they're in a municipality that hasn't opted out of bricks-and-mortar cannabis sales.

Because they aren't bound by government regulations, the black market websites are selling products not yet cleared for legal sale in Canada — from balms to potent concentrates to edible marijuana-infused candies and treats. Some products are directly targeted at medicinal users seeking pain relief rather than intoxication.

They don't advertise that what they're doing is illegal, and use slick-looking websites with polished online shopping software. Some offer coupon codes for discounts and promise "organic" cannabis grown without pesticides and fertilizers.

One Toronto-based site even maintains a customer service centre that answers calls between 8 a.m. and 1 a.m. every day, offering refunds to dissatisfied customers.

A oversupply of cannabis on the illegal market means some websites can afford to sell dried marijuana for as little as $3 a gram, drastically undercutting legal options.

"When you're dealing with such a price differential, that's a no-brainer for a lot of people on fixed incomes," Thurley said. "My read is there's a glut on the market because they haven't been able to move it as fast as they could with dispensaries."

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Supply does not appear to be an issue post-legalization. Local unregulated grow-ops, including one in the former Waterloo Flowers nursery on Highway 7 outside of Breslau, have continued to stock a black market that's proving stubbornly resilient.

gmercer@therecord.com

Twitter: @MercerRecord