Canada’s Cannabis Prices Increase After Legalization

CULTURE MAGAZINE: “The taxes and fees create prices that are high out of the gate, and then a lack of competition prevents those prices from being slowly pushed down,” said David Clement, the North American affairs manager for the Consumer Choice Center.

The money generated from taxes and licensing go to fund the cannabis program, and Clement told CBC News that they will use an estimated half a billion dollars over the next five years. On top of that, some provinces in Canada have access to legal cannabis only through government-run shop fronts or online retail.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Kanada: Neue Statistiken zeigen Probleme mit dem legalen Cannabis-Markt

Das liege vor allem an den hohen Kosten, die auf legale Unternehmen zukommen. Pro Jahr lägen die Kosten, um den Bestimmungen des Cannabis Act gerecht zu werden, bei mehreren Millionen Dollar, sagte David Clement, Direktor des Consumer Choice Center, gegenüber CBC.

Außerdem ließen Steuern und Gebühren die Preise in die Höhe steigen. Durch die praktisch nicht vorhandene (legale) Konkurrenz könnten sich die Preise dann halten, so Clement.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

合法化後供不應求 大麻價格漲逾17%

負監督全球監管政策的消費者權益組織——消費者選擇中心(Consumer Choice Centre)的北美事務經理克萊門特(David Clement)表示,大麻價格上漲很正常,有兩個主要因素推高了大麻成本:稅收和缺乏競爭。

克萊門特表示,合法就代表要繳納省稅和聯邦稅,加上生產商的許可執照費用和固定開支成本,這些費用都轉嫁給最終用戶。他說:「執行大麻法案中的規則和條例,每年就要花費5億元,政府自然要從許可執照費上獲取收入來彌補開支。」

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Price of pot is up since legalization, StatsCan finds

CBC NEWS: David Clement said it’s not surprising that the price of pot has risen. The North American affairs manager for the Consumer Choice Centre, a consumer advocacy group that monitors regulatory policy around the globe, said there are two main factors pushing up cannabis costs — taxes and lack of competition.

The taxes and fees create prices that are high out of the gate, and then a lack of competition prevents those prices from being slowly pushed down.-David Clement, consumer advocate

Now that it’s legal, pot is now subject to provincial and federal taxes, plus all the fees and licensing costs imposed on producers that are passed on to end users, said Clement.

“It costs half a billion [over five years] to enforce the rules and regulations in the Cannabis Act, so in order to generate the revenues to cover that they’ve implemented fees and licences on licensed producers.”Don’t delete your dealer’s number yet — legal cannabis shortage looms

On top of that, access is restricted in the majority of provinces and territories to government-run retail and online shops only.

“The taxes and fees create prices that are high out of the gate, and then a lack of competition prevents those prices from being slowly pushed down,” Clement said.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Canada: le cannabis coûte plus cher depuis sa légalisation

H24: “Il n’est pas surprenant que le prix de l’herbe ait augmenté”, affirme David Clement, directeur des affaires nord-américaines du Consumer Choice Centre, un groupe de défense des consommateurs qui fait une veille réglementaire à l’échelle mondiale. Il estime que deux facteurs principaux font augmenter les coûts du cannabis : les taxes et le manque de concurrence.

Les taxes et les frais créent des prix qui sont élevés (…), et puis un manque de concurrence empêche ces prix d’être lentement poussés à la baisse.

“Il en coûte un demi-milliard par an pour appliquer les règles et règlements de la Loi sur le cannabis, afin de générer les revenus nécessaires pour couvrir les frais et les licences qu’ils ont imposés aux producteurs autorisés”, ajoute M. Clement.

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Applications open to enter lottery for 25 retail cannabis licenses in Ontario

One consumer advocacy group criticized the government for its plan to start with just 25 stores.

“The supply issues are real. That is something that consumers are dealing with, the industry is dealing with. … that doesn’t justify a lottery system and it doesn’t justify capping retailers at all,” said David Clement, manager of North American affairs for the Consumer Choice Center.

Clement said he will be watching the results of the lottery closely and was doubtful that all of the companies drawn will be able to meet the quick ramp-up requirements to open their stores by April 1.

“They are faced with heavy fines if they aren’t able to open on time,” he said. “There are some heavy limits and stress testing they are required to meet. Our concerns with some of those criteria is that the province doesn’t treat other businesses that way.”

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Ontario cannabis retail applications are now being accepted

“The supply issues are real. That is something that consumers are dealing with, the industry is dealing with … that doesn’t justify a lottery system and it doesn’t justify capping retailers at all,” said David Clement, manager of North American affairs for the Consumer Choice Center.

Clement said he will be watching the results of the lottery closely and was doubtful that all of the companies drawn will be able to meet the quick ramp-up requirements to open their stores by April 1.

“They are faced with heavy fines if they aren’t able to open on time,” he said. “There are some heavy limits and stress testing they are required to meet. Our concerns with some of those criteria is that the province doesn’t treat other businesses that way.”

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Ontario now accepting applications for cannabis retail licences

THE GLOBE AND MAIL: “The supply issues are real. That is something that consumers are dealing with, the industry is dealing with. … that doesn’t justify a lottery system and it doesn’t justify capping retailers at all,” said David Clement, manager of North American affairs for the Consumer Choice Center.

Mr. Clement said he will be watching the results of the lottery closely and was doubtful that all of the companies drawn will be able to meet the quick ramp-up requirements to open their stores by April 1.

“They are faced with heavy fines if they aren’t able to open on time,” he said. “There are some heavy limits and stress testing they are required to meet. Our concerns with some of those criteria is that the province doesn’t treat other businesses that way.”

READ MORE
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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

How Doug Ford can modernize Ontario’s alcohol market

Doug Ford has built his brand on putting the people, who are ultimately consumers, first.

Refining Ontario’s alcohol market was a priority for Doug Ford on the campaign trail. He proudly proclaimed that convenience stores provincewide should be able to sell beer and wine. Since taking office, he’s reduced minimum pricing on beer, cancelled an incoming provincial beer tax increase, and recently expanded hours for retail sale. Despite these positive steps forward, there is still much that Premier Ford can do to further modernize Ontario’s alcohol market.

Ultimately, any changes that the government makes will require them to end the 10-year agreement that Kathleen Wynne signed with The Beer Store in 2015. The agreement allows the government to open up beer and wine sales to 400 grocery stores, but prohibits any other reforms until 2025. Ford has promised to tear up this deal, and doing so will have to be his first step toward reform.

After that, the government will have to sort out the process by which expanded private retail will take place, and who can qualify to sell alcohol. This process should include different options for retail sale. Specifically, the Ford government should allow for private sale at Ontario convenience stores, grocery stores, standalone private stores that exclusively sell alcohol, or any store, for that matter, that can meet the licensing requirements. Incorporating store variety into the modernization process ensures that the market is as open and consumer-friendly as possible.

With all shapes and sizes of stores qualifying for a licence, the next major question is the amount of stores that the province will distribute licenses to. Many will call for a cap on the amount for stores that can qualify for private alcohol sale. A cap of any sort would be a huge mistake, and wildly inconsistent given that the province will eventually have no cap for private cannabis retail sale. As Ontario Attorney General Caroline Mulroney said publicly, the benefit to uncapping retail outlets means that the amount of retail outlets is set by market demand, and not by government decree.

In terms of licensing qualifications, the Ontario government should follow Ford’s anti-red tape mantra. The process for licensing these stores should be as simple, and consistent, as possible. One important note here is that the province of Ontario already has a process for private retailers to sell age-prohibited goods (tobacco and gambling). If these stores can be trusted to sell those age-restricted goods, then there is no justification to not extend their license to the sale of alcohol. Simply put, if we allow for private retailers to sell tobacco products, which are exponentially more risky and dangerous than alcohol, then there is no reason not to trust these outlets to sell alcohol.

Once qualifications and the licensing process are established, the next major hurdle is what these outlets will be allowed to sell. Right now the LCBO has a near monopoly on the sale of spirits. Because of this, when Ontarians stroll down the alcohol section at their local grocery store, spirits are noticeably absent from store shelves. In order to truly modernize retail sale in Ontario, the government should get rid of the monopoly the LCBO has on the sale of spirits. Doing so would allow for retail outlets to offer consumers a full product range on their shelves, which would be exponentially more convenient than today’s system. Having outlets that are permitted to offer a full product range means that consumers can do all of their shopping in one place. This not only increases consumer choice, but also creates a more level playing field for the various producers of alcohol beverages. If the government were to proceed with allowing only beer and wine into private stores, it would disadvantage spirits producers who would unfairly be left with only a single retail option: the LCBO. If beer and wine producers are afforded the ability to sell their products to consumers in private retail stores, the same should be allowed for spirits.

Finally, the Ford government must overhaul Ontario’s antiquated pricing and distribution systems for alcoholic beverages. Currently, prices are set by producers and are mandated to be fixed across all retailers. This policy eliminates price competition, which artificially keeps prices high and hurts consumers. Simply put — Ontarians will never see lower prices for beer, wine, and spirits as long as this rule exists. With regards to distribution, the province should amend legislation so that retailers can purchase their products directly from producers and allow for retailers to bypass the LCBO as the perpetual middle man.

These simple changes would go a long way toward creating a truly modern, and consumer friendly model for alcohol sales. That being said, there are numerous critics of the policies just outlined. For example, Ontario’s Public Sector Union (OPSEU) has argued that increasing the amount of retail outlets for alcohol sale will cause an increase in instances of impaired driving. If we look at the example provided by OPSEU, which is Alberta alcohol privatization, retail outlets after privatization increased from 208 in 1993 to over 1400 in 2017. Products available to consumers over that same time period increased from 2200 in 1993, to nearly 23,000 in 2017. Despite the drastic increase in access, research from economist Heather Bone shows that instances of impaired driving did not actually increase. In fact, instances of impaired driving decreased in response to alcohol privatization at a rate that is statistically significant. This means that increased access had the opposite impact OPSEU is claiming.

Other critics will argue that private retail outlets can’t be trusted to sell alcohol products, and that such products will end up in the hands of minors. We know from secret shopper programs that private retailers are more likely to ID than government stores. In 2016, only 67 per cent of “secret shoppers” were properly asked for ID at the LCBO. In comparison, recent program numbers show that Ontario convenience stores have a compliance rate of nearly 96 per cent. Furthermore, this argument ignores the fact that 212 ‘LCBO Agency Stores’ — privately owned convenience stores in rural Ontario, currently sell a full range of alcoholic beverages including beer, wine, and spirits.

The last foreseeable critique is the end of the LCBO’s monopoly on the sale of spirits. Critics will state that because spirits are of a higher alcohol percentage, that they should be more strictly controlled, and thus only sold via government retail outlets. This argument doesn’t hold a glass of water when you consider that government stores are less likely to sell responsibly. That said, it is true that spirits generally have a higher alcohol percentage when compared to beer and wine. Although that is true, it misses the key fact that an ounce of a liquor has the same impact as a bottle of beer. When looked at through the lens of that reality, a bottle of spirits (750 ml) is comparable to purchasing a 24 pack of beer. Simply put, a drink is a drink, and there isn’t a good justification to treat products differently based on their percentage. In fact, this is exactly what was stated in the government of Ontario’s own Beverage Alcohol System Review from 2005. When the province sought advice on how to modernize alcohol sales, getting rid of the monopoly on spirits sales was on the list of recommendations.

Doug Ford has built his brand on putting the people, who are ultimately consumers, first. Adopting these simple changes will go a long way toward eroding Ontario’s prohibition style retail market, and putting consumers front and centre when it comes to government policy.

David Clement is the North American Affairs Manager for the Consumer Choice Center. Follow him on Twitter at @ClementLiberty

David Clement is the North American Affairs Manager for the Consumer Choice Center. Follow him on Twitter at @ClementLiberty

Originally published at https://www.thespec.com/opinion-story/9102325-how-doug-ford-can-modernize-ontario-s-alcohol-market/

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.

Consumers are paying for government’s failure to understand cannabis

David Clement is the North American affairs manager with the Consumer Choice Center

A selection of marijuana ordered from the Ontario Cannabis Store, which has become Canadas largest online pot retailer since recreational use of the mind-altering drug was legalized in October is viewed on Nov. 18, 2018 in Canada.MICHEL COMTE/AFP/GETTY IMAGES

Cannabis is a unique and versatile product. Unfortunately, regulators at all levels fail to really understand how cannabis is used, which has led to numerous policy mishaps. Simply put, federal, provincial and municipal legislators have made many mistakes when it comes to cannabis regulations. These mistakes have hindered consumers when it comes to price, supply and access.

Consumers nationwide are faced with prices that are much higher than what is otherwise available in the black market. Prices are inflated from a variety of different sources, which include: the 10 per cent federal excise tax, the 2.3 per cent federal revenue tax, various compliance and security fees, and additional sin taxes such as Manitoba’s “social responsibility fee.” The ever growing tax burden, which is ultimately paid for by consumers, is rightly raising some eyebrows with those who are wanting to purchase cannabis legally.

When it comes to supply, retailers across the country face chronic shortages. Stores, whether online or bricks and mortar, often fail to have their full product range available at all times. These shortages come from the onerous regulations that are applied to the licensed producers (LPs) who grow cannabis. Because of old Harper-era and pharma grade regulations, LPs essentially grow cannabis inside of a bank vault, which limits their ability to scale up production and get product to market.

Lastly is access. Community opt-outs and limited storefronts have created a toxic policy mixture that has ensured the black market thrives. Quebec government stores are closing on certain days, while Alberta has stopped issuing retail licences.

Ontario, which was slated to have an uncapped amount of retailers, has announced only 25 licences will be granted before April, 2019. Not having quick access to legal cannabis understandably pushes consumers back to the black market. Access problems, along with the pricing and supply issues, have played a role in keeping the black market alive. So much so that cannabis is still purchased illegally by 35 per cent of consumers.

The issues regarding cannabis regulations are easy to see, but the reason for such a disastrous policy mix isn’t quite as obvious. All of these issues come from legislators and government officials who fail to understand the versatility of cannabis as a consumer product. Cannabis isn’t just a recreational product, it is a medical product and a wellness product.

Medically, cannabis is known to be useful for treating a variety of illnesses that range from cancer, MS, ALS and fibromyalgia. As a wellness product, cannabis can be used to aid in alleviating headaches, stress and sleep problems. Lastly, cannabis is a recreational product, one that is used for its euphoric high, to enhance experiences or to calm you down.

Inflated prices occur because regulators see cannabis as a purely recreational product, one the government can use to generate exorbitant revenues. The pricing on cannabis resembles how the government views alcohol.

The issue with this view is it completely ignores that cannabis is also a wellness product and a medical product. Because the government has failed to understand this, patients are now paying excise taxes on their prescribed medicine. This is incredibly cruel for patients, many who are either on disability or fixed income.

Supply shortages have occurred in part because the federal government treats LPs as if they are only growing a medical product as opposed to a producer of a recreational product such as alcohol, which has handcuffed the industry.

For access, consumers face community opt-outs, monopoly online retail options and capped storefronts. These regulations have the stain of prohibition all over them. They approach cannabis with the mentality that cannabis is a truly dangerous, pharmaceutical grade product that needs to be heavily regulated.

For these access issues, regulators have acted as if cannabis is a hard drug. These access questions are insanely hypocritical if we look at access consumers have for other recreational or wellness products. For example, wellness products such as over-the-counter pain medications and allergy pills are readily available at all grocery stores.

Alcohol, a recreational product, is available via government-run stores, private retailers, grocery stores and even convenience stores, depending on the province. Because legislators have this faulty mindset, that cannabis is a pharma-grade drug deserving of tight access limits, consumer choice is persistently infringed upon.

Cannabis is a versatile product, one that has a variety of uses. Legislators at all levels have horse blinders on when it comes to how this legal product should be regulated. Failing to see cannabis as a multiuse consumer product has led to a series of mistakes that should have been avoided.

Originally published at https://www.theglobeandmail.com/business/commentary/article-consumers-are-paying-for-governments-failure-to-understand-cannabis/

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About David Clement

David Clement is the North American Affairs Manager for the Consumer Choice Center and is based out of Oakville, Ontario. David holds a BA in Political Science and a MA in International Relations from Wilfrid Laurier University. Previously, David was the Research Assistant to the Canada Research Chair in International Human Rights. David has been regularly featured on the CBC, Global News, The Toronto Star and various other major Canadian news outlets.