Legalized marijuana is coming, and a business opportunity too
One of the Liberal promises during the last campaign seems on the way to becoming a reality, although not before next year. Legalization of marijuana for recreational purposes should have been tabled this week in the House of Commons. And if everything goes as planned, before July 1, 2018, anxious cannabis fans after years of doing it outside the law, would finally be able to consume this drug with no more restrictions than what you currently have to drink beer or smoke a regular cigarette.
Legalizing marijuana would have a substantial economic effect, both for the government which would be able to get taxes from what would become a regular product subjected to sales tax and probably to other so-called sin taxes and for those who would be providing the merchandise to the public. Just a few months ago when Cannabis Culture tried to set foot in Montreal, it was raided by the police and its owner Marc Emery arrested. Of course, that was a sort of activism-motivated move more than a real attempt to establish a commercial enterprise in the city. Other businesses already involved somehow in the pot trade, however, are taking a more strategic approach, just waiting until the legislation is put in place. According to a report from the Financial Post section of The Gazette this week, “Shares of marijuana companies like Canopy Growth Corp. have surged more than fourfold over the past 12 months amid investor optimism over recreational sales, which Canaccord Genuity Group Inc. said in November could reach $6 billion annually by 2021.” Canopy, one of the largest companies in the pot business already has a presence in Quebec, and therefore like many other large and small pot entrepreneurs, the next big question would be how the Quebec government will regulate the marketing of the product. A report requested by the provincial government some time ago mentioned two possibilities: government owned stores—in the same style of the current liquor stores, but they would be a separate set of establishments exclusively devoted to cannabis—and allowing private retailers to be in charge, although with strict regulations. The Quebec government hasn’t made its mind yet on this issue and very likely; it would wait until the legislative process is more advanced in Ottawa. It may also consult and see what the other provinces may be planning to do. The experience of other jurisdictions could also be used. Some states in the USA have legalized marijuana, but not the federal government there. Uruguay was the first country in the world to legalize the drug for recreational use in 2013 under the charismatic José Mujica. However, it took three years before the law was implemented. Marijuana in that country is sold in specially licensed pharmacies, people who have sign-up on a registry can buy up to 10 g. per week, the drug is sold in bags featuring no publicity and two local companies have been licensed after a public tender called by the government to produce the drug.
According to early reports, leaked to various media outlets at the beginning of this week, the federal government is dealing with this issue in a very cautious way. The reason to take that approach is that there are too many players and constituents to which the government must listen in order to find some common ground. Legalizing marijuana is something that only Ottawa could do since its use is currently penalized by the Criminal Code which is under federal jurisdiction. However, there are health and retail marketing issues that fall under provincial jurisdiction. That’s why the regulation of cannabis commercialization in the planned federal legislation would be left to the provinces, including questions of the legal age to purchase the product. Age 18 would be the minimum set by the federal government, but individual provinces can set it at an older age (some people want it to be set at 25, which in my view, would only keep a black market quite active).
The legislation would also adopt the recommendations of a task force regarding measures to prevent driving under the effects of the drug, and limitations similar to those of cigarettes: no advertising, restrictions regarding the places to smoke, and especially strict penalties to those who sell to minors. These restrictions are reasonable: after all, most marijuana consumption is done through smoking (in the state of Washington more than 60 percent is smoked: people making their own joints, or buying already-packed marijuana cigarettes; only 13 percent consume it in an edible product and less than 10 percent as a drink ingredient). And when it comes to tar deposit in one’s lungs marijuana is not different from nicotine or any inhaled smoke for that matter.
In any case, especially for Montreal, a city that has embraced alternative lifestyles and embarked on the exploration of new experiences for a long time, the legalization of marijuana would be regarded by most as a long overdue measure, after all, we all know that prohibition never actually worked.
Feature image: Cannabis Culture was open just for a day in Montreal before the police raided it. That won’t happen next year