Day One Of Legal Cannabis For Canada

Yes, We Can-nabis

You can’t have missed it. The Government of Canada’s Cannabis Act came into legal force midnight last night.

Canada has become the first G20 country to legalize and regulate the substance for recreational purposes, and the second country in the world to nationally legalize.  This development builds on almost two decades of experience in the medical cannabis sphere.

The legal age will be between 18 and 21, depending on where you live. The legal maximum to possess and purchase will be 30 grams. There are rules as well around growing, sharing, taxing, importing, tampering, and making into other things. This new regime coming into place has many facets.

Whether or not you choose to consume it now that it’s legal – this change will have wide-ranging impacts and its trajectory forward will be closely watched.

Liberal-izing Cannabis

For a political play – the Liberals bet big on legalizing cannabis in Canada when they ran in 2015. For delivering on their commitment that, most seriously, started in 2012 – they will be credited with boldness and taking advantage of this majority consensus in public opinion. Public opinion has ebbed and flowed, but in recent years has trended towards widespread public support.

For example, some polls show that as many as 7 in 10 Canadians are in support of the plan. However, recent surveys have shown that almost 8 in 10 Canadians are still not interesting in consuming, and 7 in 10 aren’t interested in investing in the industry.

In 2019, it is certain that voters will remember this as being a signature achievement and delivered promise. The Liberals politically sold this on some key premises:

  • This was a public health approach that would keep cannabis out of the hands of children, improve the quality of the product, and educate Canadians;
  • This was a public safety approach that would starve the illegal market of profits;
  • This was consulted on for over three years so that no one could say it was rushed;
  • This was not aimed to be a financial boost that would pad the government’s coffers;
  • The approach would be incremental and decisions would be tested based on evidence;

This policy became synonymous with the Justin Trudeau Liberals and his youthful, progressive brand as leader, especially when he made his commitment public in 2013.

The Liberals may be blamed by those who do not follow politics day-to-day for “promoting cannabis,” but observers know they did this while consistently notendorsing the use of the product.

Questions Remain

Workplace rules: Employers, lawyers, labour groups, and employees must all figure out appropriate responses to cannabis legalization.

  • It bears repeating due to confusion around this point: just because something is legal doesn’t mean that employers have to condone its use at work or let personal use affect someone’s work. However, testing employees can end up in a sticky legal situation – so get solid advice before proceeding. Federally regulated sectors and provincially regulated sectors may have to set different rules, but there are best practices that Ensight can point you toward.

Borders: Particularly with our southerly neighbour, cannabis remains federally illegal. There remains significant anxiety about what a border guard may ask you and if that may force you to turn back.

  • The U.S. has clarified that, if the Canadian travellers purpose is not cannabis related, they will likely be able to travel, but obviously not with any cannabis on-hand. The U.S. border authorities have tried to allay concerns of hunting for people who have cannabis stocks or admitted past use on social media, although those remain concerns. On the other hand, even with pardons, particularly for those who work in the cannabis industry – there are risks with some border guards, there may be situations or stories where some Canadians are getting turned around. However, this was possible before legalization as well.

Marketing and Packaging: Brands in all sectors rely on differentiating and promoting themselves to succeed, however, with restrictive rules around brand promotion, sponsorship, and packaging – this has brands either playing in a legal gray area or hoping for organic, unpaid buzz about their product’s benefits.

Pardons: Those promoting Cannabis Amnesty were answered by the government today who outlined that they would soon introduce legislation to allow for those with past, simple cannabis possession convictions. Those who have served sentences would, under this law, pay no fee and have no wait period for pardons. This does not go as far as expungement, which still have possible impacts on border crossing.

Roadside Testing: The Drager roadside impairment testing device approved recently has been roundly rejected by several police officials across the country who will not be using it. While impairment on the roads is not new or unique to cannabis when there are alcohol, distractions, and other drugs to factor in, but police being equipped is something the government committed to. Despite new money for training, many remain more concerned and are more aware than ever of impairment on the roads.

Tax and cost: Governments have introduced excise taxes, sales taxes, annual regulatory fees, and service fees. All of these on top of shipping costs have not made cannabis sales as cheap as what was common on the illegal market. And the illegal market can always go lower, considering they have no such costs. If the government can’t keep the cost down, people may just go back to their illegal market suppliers.

  • Medical Stream: We cannot forget about medical cannabis users. They have their own stream still open. Recent taxation changes have kept excise taxes on medical cannabis, although patients would argue that their medical need means they should be getting the best quality at the lowest possible cost. Further, some wonder if production will be an issue for Licensed Producers who produce both medical and recreational cannabis.

Product Choice: Within a year, the government has committed to regulating and bringing in edible products and concentrated cannabis products (e.g. vape pens). How will those consultations shape up? Will people still buy from the illegal market in the meantime? People will probably just take oils and dried-flower options on the market now, and find ways to get vape pens they can use as well as things that they can bake it into. In U.S. jurisdictions, they have products like “shatters” that the government has sent signals they will continue to ban legal sales of. Is the government in an election year really ready to bring in these new products that may again cause a bit of “reefer madness” fear by those who were only tentatively aboard?

Moreover, these questions have been thoroughly debated and discussed, however, there are things still on the horizon and in other jurisdictions yet to fully come to the fore:

  • Will the federal government eventually introduce a new private-sector tracking system instead of the internal system they have now?
  • Will the provincial governments frustrate the purpose of the law, by seeking to prevent home grow cannabis, and will this end up in the courts?
  • How will we factor in personal responsibility for parents in keeping cannabis away from their kids when more stories arise of them getting ahold of cannabis-infused gummy bears?
  • Or will this all play out in localized anecdotes of friends deciding to consume cannabis instead of drinking at events? How much of a split will that be?
  • Will scientific health effects, condo board rules, and municipal zoning become the biggest questions among Canadians once this is more normalized?

This is not the end of cannabis policy and work with government. This is the entry point for an industry that has elements of alcohol and elements of pharmaceuticals. It is an industry that may quickly grow many billions of dollarswithin the Canadian economy. Having a GR partner with experience from the outset like Ensight is a vital part of this supply chain moving forward.

What’s Next?

The Justin Trudeau Liberals will be congratulating themselves, but cautiously watching this roll-out in order to mitigate any issues that arise. The political and polling boon to come from legalization day is yet to pan out.

The concentrates and edibles review processes will be significant for industry as new product classes come to market. This will move Canada from legalization 1.0 to legalization 2.0.

The publicly-traded companies in the stock market has been a rollercoaster thus far, and it’s not over yet. Shortages of product and new deals yet to be signed will continue to impact upon this.

Globally, Canada is making headlines for this cannabis shift. This story will continue to develop, and Ensight is here for your questions along the way.