As casual dealers retreat but both demand and prices surge, one surprising consequence of the lockdown could be the hastened professionalisation of the underground cannabis industry.
When New Zealand moved to alert level four, most people had no choice about whether to comply with the lockdown. But for New Zealand’s cannabis dealers, who were watching demand soar and are used to operating outside the law, the decision was more complicated.
Due to the risks, most dealers are respecting the restrictions. A small minority, however, are continuing to operate and trying to adjust to a newly infectious world on the fly. In the process, they are hastening a previously gradual transition to a professionalised cannabis market.
For the majority of dealers, the hazards were too large to justify continuing to work. One former dealer pointed to the recent arrest of a man with 5kg of cannabis during a routine traffic stop. “It’s not like there’s a lot of cars on the road any more. There’s a good chance the cops will stop you… It’s really risky now. You’re either going to the supermarket or work, or you’re out selling drugs and doing illegal stuff.”
According to another former dealer, the lockdown prompted fear about more assertive enforcement. “Level four gave police the ability to go into a house without a search warrant, and they were using that to get some of the big players. So everyone freaked out and there wasn’t really any activity at all.”
Most dealers are casual operators who purchase from larger wholesalers and then on-sell to friends and acquaintances. For these small-time dealers, the logistical hurdles created by the lockdown are another challenge. Travel restrictions make it difficult to meet with wholesalers. When they can meet, according to a current dealer, many wholesalers are “being stingy. Some of them are really upping the price, so us small dealers are finding it hard to suss.”
These casual operators’ withdrawal has disrupted the market. One regular customer explained that, “I have around three or four guys who always reply… I started off [lockdown] by texting them, and they all responded that they weren’t selling themselves during lockdown because of the risk.” Another complained that, “We contacted all our known dealers. And they all said, ‘We can’t.’ Either because they didn’t have enough or because they literally couldn’t get to us.”
While these casual dealers have retreated, demand has surged. Many cannabis users were unprepared for the alert level four announcement and left without enough to last the lockdown. Even users who had stocked up beforehand have found themselves using their supply faster while stuck at home. A third regular customer explained that “I’ve smoked more, because the nights I would be out at a mate’s place or doing something, I’m now at home. So I’ve been doing study during the day and then after dinner smoking weed to relax.”
With many people desperate to replenish their supply, prices have spiked. An ounce of cannabis typically costs $350 to $400. But those interviewed for this article reported enormous increases. According to one, “We paid at least $120 more than we usually do. A bit of a rip-off. But we kind of didn’t really care at that point.”
Professionalised dealers – who deal full-time, are deeply connected to supply networks, and often have few other employment options – have stepped in to exploit these opportunities. By continuing to operate, these dealers could easily help spread the virus. They nevertheless profess to care about preventing transmission. “The really important thing for me as a dealer is to make sure I’m not the one spreading the virus around to other people,” said one. “I have to really change my ways of selling, to both make my money and keep customers safe.” It’s not just compassion; few customers would be interested without being confident dealers were taking precautions.
This professionalised minority of dealers typically organise their sales through an ecosystem of cannabis communities on online platforms like Discord. According to one dealer, “There’s multiple servers. They span from a couple of hundred [members], to a New Zealand-wide one with about 25,000.” Some servers chose to close after lockdown was announced. Most didn’t. And among those that did, some reopened after just a few weeks.
These servers are encrypted and invite-only. One former dealer explained the process. “I got invited, I had to refer my friend’s username, and send a picture to the servermaster of my Discord name, a photo ID as collateral but with everything scraped out in terms of details, and then a picture of paraphernalia to make sure you’re not fucking around.” Professional dealers’ preference for these relatively secure platforms, and the difficulty of purchasing cannabis from anyone else, is prompting a shift towards using them within the wider illicit cannabis economy.
Having arranged a sale via Discord, these dealers are also using physical distancing and contactless delivery techniques similar to those the legal retail sector is planning to integrate. One current dealer explained his surprising system. “Right now, I’m putting [weed] in my lunchbox. I make sure when I handle cash, I hand sanitise my hands before and after. Same with my weed… I’d put my lunchbox outside my room door, they’d pick it up, put the money in, leave it, and then once I’m free I’ll grab it.” Others are distributing via letterboxes, where customers are instructed to leave money in advance. It’s a significant change, according to one customer. “Usually when we get [cannabis], our dealer will come in and chill out, have a bit of a sesh. But obviously that social aspect of it can’t happen any more.”
Perhaps the lockdown’s most surprising consequence will be this hastened professionalisation of the underground cannabis industry. And, while the rest of the country eagerly awaits the move to alert level three, few in the industry expect the move will affect their new trajectory. According to one former dealer, “The traditional ‘go to your one person’ model, that’s over. Because you have such a broad variety [of services], through such a secure space. You’re not having to go and meet people any more, they’re coming to you.”