Health Canada’s new grow-ready demand could squash entry of micros into the cannabis space

Also likely to take a hit are consumers. The U.S.-headquartered Consumer Choice Center (CCC) argues the new licensing process will hurt consumers. “This move is a significant blow for Canada’s cannabis market, especially cannabis consumers nationwide,” David Clement, the CCC’s Toronto-based North American affairs manager, says in a statement.

“The process to qualify as a licensed producer is already incredibly rigid. These changes will simply make it harder for new producers to enter the market, which, ultimately, ends up hurting recreational consumers and medical patients,” Clement argues. “More red tape will translate into higher prices for consumers, and less product availability. Higher prices and poor access will encourage consumers to continue to purchase in the black market, which runs directly against the federal government’s stated goal for legalization.”

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Health Canada shows, again, that it can’t properly regulate cannabis

Just this week, Health Canada announced that it would be making significant changes to the process for approving licensed producer (LP) applications. Specifically, it stated that all new applications will have to have a fully built and regulatory compliant facility at the time of their application. Health Canada has justified the move by citing that 70 per cent of preapproved applications have not ended up having their production site built and compliant with current production regulations. This change is incredibly problematic for the cannabis industry, and more importantly, for cannabis consumers nationwide.

The first issue with this policy change is that it will make it significantly harder for new producers to enter into the cannabis market. Now, because of the change, entrepreneurs and firms looking to enter the market will have to get financing without any indication from government that they will be approved. From a financing side, this makes investment into new cannabis firms extremely risky, with the potential for millions in sunk costs if an applicant doesn’t get approved after already building a fully compliant facility. This will drastically increase upfront costs for those who do enter the market, and those costs ultimately end up getting paid by consumers via higher prices.

The second issue with the change is that by adding more red-tape into the production process, Health Canada is actively limiting supply. Supply issues have been a dark cloud over Canada’s legalization process, and this change will only make that worse. As consumers, we want a free and fair market with appropriate access. This is important because appropriate access and product availability is what will help shift consumers away from the black market. Making it harder for new producers to get approved is yet another example of federal policy tying the hands of the legal market. If the legal market cannot properly compete with the illegal market, it is naive to think that consumers will shift their purchasing behaviours.

The third reason why this policy change is misguided is that it demonstrates a complete and utter lack of self-reflection on the part of federal regulators. One of the biggest issues with Canada’s legal market is that the regulations, for the most part, have not changed since the medical cannabis industry was formalized under the Harper government. When his former Conservative government had to deal with the reality of medical cannabis, they created a regulatory framework that mirrored how pharmaceutical products are produced. Those regulations were over-the-top and heavy-handed then, which makes them downright ridiculous now in the context of recreational production and use.

Unfortunately, the federal Liberal government never picked up on those regulatory mistakes. In fact, their own release on this policy change justifies the change because it bringscannabis production regulations more in line with pharmaceutical regulations. It is baffling that in the face of supply issues, and a prevalent black market, the Trudeau government has decided to further cement Stephen Harper’s mistakes.

The final issue with this change is that the proposed solution does nothing to address the problem that Health Canada was trying to fix. If Health Canada has an issue with the amount of preapproved applicants who end up with approved production sites, then they should address the hurdles these applicants are facing that prevent them from being build-ready. The solution here would be to liberalize the production regulations so that these paper-reviewed applicants can get to the production stage as soon as possible. Instead of going the route of liberalizing, Health Canada has doubled down on red tape, which benefits nobody.

All of this stems from the fact that the federal government has never really known how to properly regulate cannabis. When it comes to production, all the federal government would need to do to help solve these issues would be to have production regulations that mirror how breweries, distilleries, and wineries are regulated. Or, better yet, the government could simply apply food-grade production restrictions on legal cannabis. Simple changes in production regulations, as opposed to more red-tape, would go a long way to creating a more dynamic and responsive cannabis market here in Canada, one that best serves the needs of patients and consumers, while stamping out the black market.

Airbnb regulations a ‘bad idea’ says consumer advocate

A group of consumer advocates is warning against additional regulations for home share services after Windsor city council agreed to move forward with adding regulations. 

David Clement, with Consumer Choice Center, said adding regulations can make home sharing services more expensive.

“When local governments go down this road, they almost always add in a licensing fee,” said Clement. “That licensing fee is usually just a cash grab.”

Regulations passed in Toronto last year are under appeal by Airbnb owners in the city, while the city of Vancouver is calling regulations put in place there a success. 

Redundant regulations

According to Clement, more often than not, the regulations that are passed are redundant. 

East Windsor resident Kipp Baker said the home share in his neighbourhood leaves their garbage cans out all week long. 

“Garbage pails blowing down the street,” is Baker’s main concern. “They put their garbage out on a Sunday or Monday but pickup isn’t until Thursday.”

Baker is worried about skunks and raccoons getting into the garbage and making a mess, especially as it gets warmer outside.

According to Baker, the home share near him is mostly rented on weekends, but the homeowner doesn’t live on site.

“The owners live in Vancouver, but I know bylaw officers are leaving paperwork in the mailbox,” said Baker, who has seen a City of Windsor bylaw vehicle out front “at least three times.”

Bill Tetler, with Windsor’s bylaw enforcement, said they don’t cover home share services.

 “We could have been there for a wide range of issues,” said Tetler.

In Windsor, garbage and garbage pails can only be put out for collection after 7 p.m. the night before collection. The empty bins have to be brought back off the curb by 8 p.m. the day of collection.

Doesn’t matter if homeowner lives off-site

According to Tetler, it doesn’t matter if the house is used for home share purposes, or if the homeowner lives off site — there’s a set fine for leaving garbage can out when they aren’t supposed to be out. 

“The simple solution is applying whatever fines exist, or applying the bylaws as they are written, to whomever the homeowner is,” said Clement. “There has to be a way to communicate with those folks without them being on site.”

Tetler said bylaw officers, in the event of an absent homeowner, would leave warnings and tickets on the door or in the mailbox. If it got to an extreme point, bylaw enforcement could call the homeowner to appear in court. Someone would have to file a complaint for bylaw officers to go in the first place.

Home share platforms ‘regulate themselves’

When it comes to safety measures, Clement said platforms regulate themselves, and additional government regulations on top of that “just make the process more burdensome for hosts.”

“There is an incentive practice built into the rating schemes for these services,” said Clement. “There’s a shift towards encouraging best practices. The system is set up to discourage [behaving improperly].”

Baker said there have been loud parties and crowded street parking because of the home share in his neighbourhood — but even though he wants regulations in place, he doesn’t know what could be done. 

“It should be simple,” said Baker, pointing to bylaw enforcement taking more initiative — something the department in Windsor doesn’t have the resources to do. 

Clement said one solution might be for home sharing services to add a “comments from neighbours” section — but that really people should just go knock on the front door.

“I’d encourage people to talk to their neighbours,” said Clement. “Have a civil discussion about what is and isn’t working.”

Katherine Donaldson, corporate policy coordinator for the city of Windsor said Windsor would likely not move forward with regulations until a decision was made from the Toronto appeal. 

“Until we get that precedent from the Toronto case, the Toronto appeal, we aren’t moving forward with any of the other considerations until we get that legal framework.”

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Report: Health Canada’s Cannabis Rule Changes Will Hurt Consumers – Building Must Be In Place Before Application

Toronto – On Wednesday, Health Canada announced that it will make significant changes to the process for approving licensed cannabis producers. Specifically, Health Canada will now require all new producer applicants to have a fully built and compliant site at the time of their application. Health Canada has justified the move by citing that a majority of applications in the current process undergo review, but have not yet provided evidence that they have a fully built and compliant production site.

The fear is that red tape and a major initial financial output would be too much for business owners.

David Clement, Toronto based North American Affairs Manager of the Consumer Choice Center (CCC), said “This move is a significant blow for Canada’s cannabis market, especially cannabis consumers nationwide.

“The process to qualify as a licensed producer is already incredibly rigid. These changes will simply make it harder for new producers to enter the market, which ultimately ends up hurting recreational consumers and medical patients. More red tape will translate into higher prices for consumers, and less product availability. Higher prices and poor access will encourage consumers to continue to purchase in the black market, which runs directly against the Federal Government’s stated goal for legalization,” said Clement.

“If Health Canada has an issue with the amount of pre-approved producers who end up grow-ready, then they should simply liberalise the regulations on the production side to make it easier for producers to go from paper review to fully operational. Rather than take this approach, the government has doubled down on bureaucracy and red tape, which harms everyone involved,” said Clement.

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Ontario reveals housing supply action plan

With a focus on making it easier to build (and afford) a wider variety of housing, the action plan is being called a win for consumer choice. Heather Bone, a Toronto-based Research Fellow for the Consumer Choice Center (CCC) and Economics Ph.D. Student at the University of Toronto, said: “It is good to see the province is doing its part to reduce the red tape that makes it so difficult for developers to build.”

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Don’t blame Doug Ford for the costs of breaking unfair beer retailing contracts

Opinion: We should blame politicians who set up and maintained a system that has both inconvenienced and overcharged consumers for nearly a century.

A lot has changed in the last 92 years, but Ontario’s alcohol policy is one thing that has remained largely the same. Following the repeal of alcohol prohibition in 1927, the province granted Brewers Warehousing Co. (later Brewers Retail/The Beer Store) a monopoly over beer sales, to appease prohibitionists. Now Prohibition’s legacy lives on through The Beer Store’s near monopoly on beer sales today, and Ontario Premier Doug Ford is facing both political heat and legal threats by trying to challenge it.

If the Ford government follows its plan, beer and wine will be available in corner and big box stores by Christmas. Evidence suggests this policy will enhance consumer choice by expanding variety, increasing convenience, and lowering prices. Anindya Sen, an economist at the University of Waterloo, estimated that roughly $700 million in annual revenue earned by The Beer Store is incremental profit earned because of its monopoly status and ability to charge higher prices. Additionally, The Beer Store’s roots in Prohibition demonstrate that lack of access is a feature, not a bug, of the current retail system. This inconvenience may be why 54 per cent of Ontarians support allowing more privately owned stores to sell alcohol.

Modernizing alcohol sales is good public policy. While the LCBO’s earnings serve as a cash cow for the province, The Beer Store’s profits primarily go into the hands of large multinational brewers — Anheuser Busch-InBev, through its Labatt subsidiary; Colorado-based Molson-Coors; and Japan’s Sapporo, through its Sleeman subsidiary. Additionally, retail monopolies do little to promote social responsibility. As one of the authors’ research has shown, privatization of alcohol sales in Alberta was associated with a lower rate of impaired driving.

The precedent for this change exists, as convenience stores already sell lottery tickets and cigarettes, and face hefty penalties for selling to minors. Furthermore, alcohol liberalization isn’t only good for consumers, it’s good for the economy. By studying similar reforms in British Columbia, a new report from the Retail Council of Canada predicts that Ford’s proposed reforms would result in 9,100 new jobs and a $3.5-billion dollar increase in GDP.

We should not blame the Ford government for pursuing alcohol modernization

However, pursuing this change has had its own set of challenges. The Beer Store has threatened legal action against the province if it moves forward with its plan, citing its agreement with the previous Liberal government that limits the number and type of beer-retailing outlets in Ontario until 2025. Beer-industry insiders claim a breach of contract could cost Ontario up to $1 billion. While there are reasons to doubt this figure, including that estimates have rapidly grown from a previous estimate of $100 million in the short time since the story about the Ontario government’s plans broke, it has proven to be politically challenging for the Ford government. Critics have claimed that moving forward would be irresponsible due to the financial risk, with Ford being directly responsible for the potential losses.

There are two important lessons to take from these exorbitant claims. The first is that the figures that opponents of the plan are claiming are entirely unsubstantiated. They are simply the figures they claim. In order for them to have any legal weight whatsoever, they would have to be proven in court, which would require The Beer Store to open its books. Given the grandiose figures being tossed around, it is entirely possible that The Beer Store is bluffing in an attempt to maintain its privileged treatment. The second important lesson here is the price of cronyism overall. The government over-regulating and picking winners and losers in the market hurts consumers twice over. First through inflated prices and poor customer service, and again as taxpayers via legal challenges. Setting a precedent that the Ford government stands with consumers over special interests would clearly show that it stands for the people.

When it comes to placing blame, there is a lot to go around. We should blame the politicians who set up and maintained a retail system that has both inconvenienced and overcharged Ontario consumers for nearly a century. We should blame the previous government for attempting to tie the hands of subsequent leaders by signing the latest contract with The Beer Store. However, regardless of the outcome of the legal challenge, we should not blame the Ford government for pursuing alcohol modernization. While this move may be costly, it is necessary to right past wrongs and end Ontario’s Prohibition-era alcohol framework. Ford has lots to answer for, but not this.

Heather Bone is a research fellow at the Consumer Choice Center and an economics PhD student at the University of Toronto. David Clement is the North American affairs manager of the Consumer Choice Center.

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Cannabis au Luxembourg : « Éviter les erreurs du Canada »

À cause des taxes trop élevées sur le cannabis, entre 30 et 40% des consommateurs se tournent toujours vers le marché noir, ont souligné les spécialistes canadiens. (photo Tania Feller)

Des représentants canadiens de l’Agence pour le choix du consommateur sont venus à Luxembourg pour aider les décideurs politiques à faire les bons choix en matière de légalisation du cannabis.

Membres de la direction de l’ONG Consumer Choice Center (l’Agence pour le choix du consommateur, ou CCC), David Clement et Yaël Ossowski sont venus plaider pour une politique réglementaire intelligente en matière de légalisation du cannabis récréatif. Guidés par le porte-parole de l’organisation, le Luxembourgeois Bill Wirtz, les deux Canadiens vont aller à la rencontre des décideurs politiques pour les mettre en garde «contre certaines erreurs à ne pas commettre».

À la veille d’un voyage au Canada du ministre de la Santé, Étienne Schneider, le CCC rappelle que son premier objectif est «d’étouffer le marché noir», et qu’il ne sera pas atteint au Canada au vu des taxes trop élevées que le pays a choisi d’appliquer sur le cannabis. «Entre 30 et 40% des consommateurs se tournent vers le marché noir, car les prix y sont plus attractifs», témoigne David Clement.

Il paraît donc capital pour les activistes du CCC, comme ils se définissent, d’appliquer une taxe très modérée sur les produits pour éradiquer le marché parallèle. Dans certaines provinces canadiennes, ces taxes cumulées peuvent s’élever à 30%, ce qui décourage les consommateurs de se fournir légalement. Aux États- Unis, l’Alaska n’impose pas de TVA et la Californie reste modérée avec 15% de TVA sur le cannabis. Certes, le Colorado avec ses 30% de taxe a engrangé 245 millions de dollars de recettes fiscales, «mais elles ne devraient pas être le seul objectif de la légalisation du cannabis», insiste David Clement.

Contre le « paquet neutre »

Autre recommandation : autoriser la consommation sur la voie publique partout où le tabac est également toléré, contrairement à ce qu’a décidé l’État du Colorado et l’État de Washington où la consommation publique demeure illégale. Pourquoi ? Parce que les personnes à plus faibles revenus sont souvent locataires et les propriétaires leur interdisent souvent de fumer dans les logements. Les deux représentants canadiens se targuent d’avoir réussi «grâce à (leur) action» à faire changer d’avis le gouvernement de l’Ontario sur ce sujet.

«Malheureusement, l’absence de salons de consommation de cannabis est une occasion manquée de l’exemple canadien», estime le CCC alors qu’ils présentent plusieurs avantages : on peut y contrôler l’âge légal des consommateurs et ils permettent de fumer dans un lieu protégé, évitant ainsi aux gens d’être gênés par les volutes dans les lieux publics.

La vente aux non-résidents reste un point très discuté quand on évoque la légalisation du cannabis récréatif puisqu’il s’agit d’éviter un trafic transfrontalier. Là encore, une telle clause de résidence profite au marché noir.

Autre erreur figurant sur la liste du CCC, celle qui consiste à restreindre voire interdire le marketing pour le cannabis et le Canada l’a commise en préférant le «paquet neutre». «Nous voulons que les consommateurs prennent des décisions éclairées lorsqu’ils achètent une substance intoxicante comme le cannabis», défend le CCC. De plus, un paquet neutre permet aux criminels «de faire passer plus facilement leur produit pour un produit légal», et ainsi de brouiller les pistes. Mettre une marque sur un emballage, c’est éviter la contrefaçon et fidéliser le client si le produit est bon.

Simplifier la production

Enfin la production, c’est l’autre gros morceau de la future législation qui est très attendue. «Un bon régime réglementaire garantit que l’offre peut suivre le rythme de la demande, ce qui est vital pour détourner le consommateur du marché illégal», souligne le CCC. Cela signifie qu’il faut éviter les lourdeurs administratives et la réglementation très restrictive d’un pays comme le Canada. Les règlements de sécurité et la masse de formalités sont tels qu’ils ont découragé certains candidats de se lancer dans la culture du cannabis. «Au Québec, les magasins publics de cannabis ont dû fermer du lundi au mercredi en raison de pénuries d’approvisionnement et donc 35% des consommateurs sont restés fidèles au marché noir», indique le CCC.

Les coûts de construction des installations qui doivent respecter les exigences strictes établies par le législateur canadien empêchent un plus grand nombre de producteurs d’être sur le marché. Le CCC préconise un processus simplifié, mais encore il devrait être possible de s’approvisionner auprès de fournisseurs d’autres pays qui ont déjà une réglementation sur le cannabis.

«Si la légalisation est exécutée avec tiédeur et s’écarte de ces recommandations, nous craignons que des options illégales demeurent», conclut le CCC. Mais en les suivant, «les États peuvent s’assurer un marché du cannabis favorisant à la fois le choix et la sécurité des consommateurs».

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Luxemburg auf dem Weg zur Legalisierung: Lobby fordert verbessertes kanadisches Modell

Auf dem Weg zur Legalisierung von medizinischem und rekreativem Cannabis könnte sich die Regierung am kanadischen Modell inspirieren. Vertreter des Consumer Choice Center (CCC) besuchen derzeit Luxemburg. Die Lobbyisten wollen Entscheidern aus Politik und Gesellschaft das kanadische Modell vorstellen – und dafür werben, dass keine hohen Steuern auf Marihuana-Produkte erhoben werden.

Das CCC ist eine US-amerikanische Non-Profit-Organisation. Sein Ziel: Die Auswahl an Konsumgütern zu erhalten, die es durch staatliche Regulierung gefährdet sieht. Laut der Organisation Corporate Europe Observatory soll das CCC von der Tabaklobby und den konservativen Hardlinern Charles und David Koch finanziert werden. Seit 2017 ist die Organisation in der Europäischen Union tätig.

In Luxemburg versuchen CCC-Vertreter, mit Parteien und Ent- scheidern aus Politik und Gesellschaft Kontakt aufzunehmen. Sie wollen das kanadische Cannabis-Modell vorstellen – und warnen davor, dass der Staat zu hohe Steuern auf die Hanfprodukte erhebt. Im Oktober 2018 hat Kanada als erstes Land der Welt den Handel von Marihuana legalisiert. Cannabisprodukte werden in manchen kanadischen Provinzen teils bis zu 29 Prozent besteuert, erklärt das CCC. Die Organisation fordert, die anfallenden Steuern angemessen gering zu halten.

“Obwohl Steuereinnahmen ein wichtiger und strategischer Faktor sind, der bei der Legalisierung von Cannabis zu berücksichtigen ist, sollte es nicht das alleinige Ziel von Gesetzgebern sein, die ihre Märkte für Cannabis öffnen wollen. Durch die Beibehaltung eines niedrigen und wettbewerbsfähigen Steuersatzes kann Luxemburg den legalen Konsum ermöglichen. Dies wird sich sowohl bei den Steuererhebungen als auch für allgemeine Investitionen in der Gesamtwirtschaft positiv erweisen”, sagte David Clement, der North American Affairs Manager des CCC.

Billigstes Grad in Kanada: 7,31 Euro

Schätzungsweise die Hälfte des verkauften Cannabis in Kanada wird immer noch auf dem Schwarzmarkt umgesetzt. Der Grammpreis für das billigste Gras beträgt rund 11 kanadische Dollar (umgerechnet 7,31 Euro). Damit sich diese Situation nicht in Luxemburg wiederholt, würden die Experten der Regierung raten, Cannabisprodukte nicht zu hoch zu versteuern. Denn der Schwarzmarkt floriert, wenn viele Menschen vom legalen Handel ausgeschlossen sind. Um diesem Trend entgegenzuwirken, würde das CCC den Verkauf von Cannabisprodukten auch an Nicht-Luxemburger begrüßen.

Momentan ist es in Kanada verboten, in der Öffentlichkeit Gras zu rauchen, Coffeeshops gibt es nicht. Somit wurde einkommensschwachen Konsumenten die Möglichkeit genommen, in einem legalen Rahmen ihren Joint zu rauchen. Im Gegensatz hierzu darf jeder Volljährige zu jeder Zeit 30 Gramm Gras bei sich tragen. Das CCC schlägt vor, den Konsum von Marihuana in Luxemburg ähnlich zu reglementieren wie den Konsum von Tabak.

Keine Einzelheiten zum Gehalt

Cannabis darf momentan in Kanada legal vertrieben werden. Die Konsumenten erhalten jedoch keine Einzelheiten zum CBD- oder THC-Gehalt. CBD-Gras kann schon länger ohne Rezept in Hanfläden in Luxemburg erworben werden. CBD gilt als nicht-psychoaktives Cannabinoid – es wirkt sich also nicht auf das zentrale Nervensystem aus, weshalb die Wahrnehmung auch nicht verändert wird. Für den Rausch sorgt der Wirkstoff Tetrahydrocannabinol (THC).

Auch über die Wirkungen dürfen die Verkäufer nicht informieren. David Clement sieht hier vor allem die Erstkonsumenten unnötigen Gefahren ausgesetzt. “Ein sichtbares Branding ermöglicht es den Kunden zudem, ein Vertrauensverhältnis zu ihrer Marke aufzubauen.” Um Engpässe zu vermeiden, rät das CCC, die Zulassungslizenzen nicht zu deckeln. Ob sich die Regierung bei der Legalisierung von rekreativem Gras nur an dem aktuellen kanadischen Modell orientiert oder ob die Verbesserungsvorschläge der Experten des CCC berücksichtigt werden, ist zurzeit noch nicht absehbar.

Parlamentarische Arbeitsgruppen sind derzeit dabei, alle möglichen Optionen in Sachen Cannabis-Legalisierung abzuwägen. Gesundheitsminister Etienne Schneider wird in naher Zukunft auf jeden Fall mit einer Delegation nach Kanada reisen, um sich vor Ort ein Bild zu machen.

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Analyst Says Milk Prices Showing Improvement and Worst Is Over

In other trade news, while the future of President Trump’s U.S.-Mexico-Canada, free trade agreement remains uncertain in a divided U.S. House of Representatives, the Toronto-based North American Affairs Manager of the Consumer Choice Center (CCC), David Clement called on the Canadian government to give it a thumbs down. A CCC press release stated, “The Federal […]

Are excise taxes killing Canada’s cannabis market?

David Clement is the North American Affairs Manager at the Consumer Choice Center. Much has been said about Canada’s roll-out of legal cannabis. The system thus far has been riddled with hiccups, supply shortages, prohibition-style penalties and significant limitations on consumer access. All of that aside, one of the most glaring issues with Canada’s cannabis […]

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