Don’t be too bummed by weeds in the garden of legalization paradise

Cannabis | by Gregory Beatty

It was probably unrealistic to expect a smooth “rollout” when recreational cannabis became legal on Oct. 17. For decades, it had been demonized as an illegal drug on par with heroin, crack cocaine and crystal meth. So in moving to legalize, the federal Liberal government had to tread carefully — both at home and internationally, where Canada is partner to several drug treaties.

Then there was the constitutional minefield that had to be navigated, with federal, provincial and municipal governments all having jurisdiction over different areas of the cannabis trade from production and distribution to sale and consumption.

With such a tortuous path, there was no shortage of opportunities for opponents to throw wrenches into the process. In Saskatchewan, the Brad Wall government wanted nothing to do with legalization, so they delayed acting until late in the legislative game — with predictable results, says cannabis industry consultant Kathleen Thompson.

“It’s a massive social policy and law enforcement initiative so it’s understandable it would be clumsy,” says Thompson. “Having said that, it was very disappointing how uncoordinated it was. In Saskatchewan, 51 retail licenses were issued, and then on Oct. 17 a very small number of stores were actually open.

“My understanding from having met with a number of private retailers is they were given assurances they would have an adequate supply of cannabis but that didn’t happen,” Thompson says. “That was distressing for the retailers, and also to Saskatchewan residents who were looking forward to being able to purchase legally. So it was quite underwhelming.”

Two months into legalization, the number of Saskatchewan retailers is still underwhelming. Most aren’t open full-time, either. Typically, they sell out of stock, then close for a few days until their next shipment arrives.

Unlike provinces such as Alberta and Ontario, which have provincially owned wholesalers that sell to retailers (in Alberta, it’s Alberta Gaming, Liquor and Cannabis) Saskatchewan opted for a private wholesale model.

“To be fair to the province, I believe they only had around 10 or 12 licensed producers apply to get a wholesaling license,” says Thompson. “So that’s at the core of the supply problem, that not enough producers bothered to work with the government to get on our wholesaling list. So there were only a small number of producers that retailers could go to.”

Black Market Blues

One of the stated goals of legalization is to replace the black market. But until the legal industry can compete in price, quality and convenience, that won’t happen.

“A fundamental issue in encouraging existing cannabis consumers to begin purchasing legally is quality,” says Thompson. “As a health advocate, I’m mindful of people with HIV or immune-compromised issues, and feel Canadians are better off with legal, tested products. However, the perception right now, and perhaps the reality, is that legal cannabis from large companies is much poorer than what you can access on the black market.”

Prices, driven in part by supply shortages (“Business 101” is how one Saskatchewan retailer put it on opening day) are also out of whack with the black market.

Cannabis consumers from vulnerable populations are especially impacted, says Thompson.

“Eighty per cent of people with disabilities live in poverty, and right now legal cannabis is much more expensive than the illegal cannabis you can get online or through a phone call,” Thompson says. “What’s going to be really important for the future is making sure we have compassionate pricing.”

One development that could help medical users is a Health Canada process to assign cannabis a drug identification number. That will create a legal avenue for those who qualify to have their cannabis covered by insurance and other health/social services programs.

Cost isn’t the only hardship medical and other low-income cannabis consumers are facing. Under federal law, adults are allowed to grow up to four plants for personal use. Quebec and Manitoba negated that right in their legislation. Saskatchewan didn’t, but it did restrict smoking cannabis to privately owned homes.

“Vulnerable, marginalized low-income people are generally in the private rental market or social housing,” says Thompson. “We’re hearing many reports from across Canada that people are getting notices saying both smoking and cultivation are prohibited. If people are able to cultivate their own plants, it’s a way to get around the high cost. But as a kneejerk reaction, private residence owners are instituting policies to restrict smoking and cultivation.”

For many medical users, smoking is the most effective way to consume cannabis. Before legalization, they were able to smoke and grow under the radar. Now, they’re being denied that opportunity.

And a constitutional challenge seems inevitable.

Another area that will likely see litigation is impaired driving. Both Ottawa and the province have instituted strict rules based on THC concentration in the blood. The problem is , THC concentration isn’t an accurate measure of impairment — unlike blood alcohol content for drunk driving. That’s because cannabis is metabolized differently in the body than alcohol, so traces of THC often linger days after consumption.

“Saskatchewan has come out with a very restrictive policy approach which is understandable given that we have the highest rate of deaths by drunk driving in Canada,” says Thompson. “But it’s going to be complicated, particularly for medicinal users who use higher dosage levels for pain and other health issues.

“That’s going to require monitoring, and a lot of education and dialogue in our communities.”

The Devil’s Lettuce

Canada isn’t the only place cannabis is making news. During the November midterms, Michigan became the tenth U.S. state to legalize for recreational use. And Missouri and Utah approved medical use, bringing the total of legal medical states to 33.

Newly elected Mexican president Andrés Manuel López Obrador has promised to end cannabis prohibition, and the U.K. and New Zealand just approved liberal medical use rules that could pave the way for legal recreational use.

Australia, Germany, Israel, Spain, Jamaica, Thailand and Czech Republic are other countries where rules around cannabis are being loosened.

In a November report, Forbes estimated cannabis would be a $146 billion industry world-wide by 2025.

Long a leading producer of medical and black market cannabis, Canada could be a major player. Unfortunately, industry development is likely to be hindered by the stigma that still exists around cannabis.

In late November, for instance, Catholic bishops in B.C. and Yukon, as part of a broader church policy that was also endorsed by the Chair of the Canadian Council of Imams, condemned recreational cannabis as “sinful”.

Conservative supporters aren’t shy about throwing around insults like “stoner” and “addict” when taking “pot shots” at the Liberals as the country gears up for next October’s federal election.

In fact, when leader Andrew Scheer was asked post-Oct. 17 if the Conservatives would recriminalize cannabis if they were elected, he was initially non-committal. Later, he clarified that his government wouldn’t recriminalize cannabis, but might make changes to the legal framework after assessing the “consequences.”

With uninformed and backwards social conservative ideas dominating the Conservative agenda these days, who knows what that could mean? For now, researchers — both in industry and academia — are free to study cannabis to better understand its medical and recreational properties. Edibles and other refined products are due to become legal next fall, which will expand the cannabis market further.

Another positive development, says Thompson, is Health Canada’s recent decision to open up its regulations for cultivation and processing.

“They are now allowing micro-cultivation and micro-processing. That’s designed to allow smaller, craft-quality growers to come into the system,” she says.

Some of those growers are already out there. They’re in the black market now, but would be able to switch over. In. B.C. though, micro-growers are running into municipal roadblocks where they’re being denied zoning approval.

If it’s happening in B.C., it’s easy to see it happening here too.

While Saskatchewan has 51 retailers province-wide, Calgary alone has approved permits for 117. So out of the gate, the Sask. Party didn’t exactly chart a bold course. The government has also clashed with Muscowpetung First Nation over its plan to open an on-reserve dispensary.

Federally and provincially, producers and retailers are butting up against extremely restrictive rules when it comes to marketing and promoting cannabis. That, in turn, will hurt their ability to develop their brands and compete successfully on the domestic and international market.

So while legalization is here, there’s still plenty of work to be done to maximize the benefits of this soon to be booming industry.

“I think it was tremendously brave of our federal government to take this issue on, and it’s been very challenging for all provincial governments, and they’re responded as best they can,” says Thompson.

“It’s a big social experiment, and we’re in the early stages. But it does put Canada at the forefront of this industry globally. That gives us tremendous export opportunities,” she says.

“Yes, it’s going to be complicated. But that’s the nature of social policy.”