Cannabis Legalization

Now Is the Time: Congressional Legalization of Cannabis Will Unite a Polarized Nation

CONTACT:
Yaël Ossowski
Deputy Director
Consumer Choice Center
yael@consumerchoicecenter.org

Now Is the Time: Congressional Legalization of Cannabis Will Unite a Polarized Nation

Washington, D.C. –  The eyes of the nation are on the U.S. Capitol this week as millions are tuning in to the impeachment hearings of President Donald Trump. There is plenty of polarization to go around, but Congress has a unique opportunity to deliver a bipartisan win that will be cheered by millions of Americans: rescheduling cannabis would do exactly that.

The House Judiciary Committee today reviewed H.R. 3884, the Marijuana Opportunity Reinvestment and Expungement Act of 2019, a bill that would remove Schedule 1 drug status for cannabis, set up simple rules and community incentives for decriminalization, and allow states to create their own rules.

Yaël Ossowski, deputy director of the DC-based Consumer Choice Center, said a bipartisan endorsement of cannabis decriminalization and legalization before Christmas would unite the nation in a time of bitter partisanship.

“Americans are united in their opposition to the status quo on cannabis policy at the federal level. That’s why now, with so much polarization emanating from Washington, is the perfect time to remind the American people why they elected their representatives in the first place,” said Ossowski.

“Federal cannabis prohibition has created generations of victims, plagued our criminal justice system with injustice, and inflamed a vibrant illegal sector that operates without regulation or concern for safety.

“That’s why we urgently need smart cannabis policy now, one that encourages competition, entrepreneurship, avoids red tape, and eradicates the black market. This is the biggest opportunity for a major policy change we have seen in decades, and consumers and citizens are clamoring for it.

“Consumers should be able to choose their cannabis products safely in a legal and regulated market. That would benefit not only citizens and patients, but also promote economic growth, raise revenue for cash-strapped cities and states, and finally restore justice to the millions who have been locked out of society due to their use of cannabis.

“Nearly a third of the country already has legal cannabis. Now it’s up to Congress to give the rest of the nation that opportunity and help us heal the partisanship divide when we need it most,” said Ossowski.

Earlier this year, the Consumer Choice Center published its Smart Cannabis Policy Primer, available here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice.

We represent consumers in over 100 countries across the globe and closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

Cannabis

Therapeutic CBD oil doesn’t belong under restrictive Cannabis Act

The federal election is behind us, and all Canadians are probably pretty thankful for that.

That said, in what was arguably Canada’s most irritating, and cynical, election, no one spoke about Canada’s cannabis market. The opposition parties did not take aim at the Liberals for their mistakes, nor did the Liberals really use legalization as a talking point on their legislative success. Now that we have a minority government, it is important that this new government enacts change to make Canada’s cannabis market more open and consumer-friendly.

Much has been said regarding the issues with excise taxes, the federal government’s overly paternalistic marketing and packaging rules, and burdensome production regulations that have handcuffed producers. All of these missteps have hurt the attractiveness of the legal market, and that only benefits those who are selling cannabis illegally.

One mistake made in the Cannabis Act that hasn’t gotten any coverage is the federal government’s failure to differentiate appropriately between THC and CBD.

For those who don’t know, CBD (cannabidiol) is one of the over 100 cannabinoids found in the cannabis plant. On its own, it has a variety of medicinal and wellness uses. CBD can be used for pain in patients with disorders such as fibromyalgia and can be used to prevent seizures for people who suffer from neurological disorders such as epilepsy. It can also be used to treat common issues such as joint pain, inflammation, and act as a sleep aid. Most importantly, CBD is not an intoxicating substance like THC.

Because CBD products are not intoxicating, and have a significantly lower risk profile, they shouldn’t be treated the same as cannabis products with THC. All that would be required to right this wrong would be to remove non-intoxicating CBD products from the Cannabis Act altogether.

Quite simply, any CBD product with a THC concentration of less than 0.3 per cent (the U.S. legal standard) should be treated as a natural health product, and exempt from the rules and regulations of the Cannabis Act.

Removing CBD products from the Cannabis Act would have several immediate benefits for consumers. The first is that it would exempt CBD products from the overly heavy-handed marketing, branding and plain packaging restrictions set out in the Cannabis Act. Having cannabis regulated in the same way as tobacco was a huge mistake, given the differences in risks between products. Regulating cannabis like tobacco was a mistake, but treating CBD products like tobacco is downright comical.

Beyond the chance to peel back federal paternalism, the removal of CBD products from the Cannabis Act would allow for products to brand their desired impact, something that is currently, and irritatingly, illegal for all cannabis products. The current prohibitions are a huge disservice to consumers because they prevent them from being presented with more product information when making purchases. Public policy should encourage informed consumer decisions, not actively prevent them. Removing CBD from the Cannabis Act would allow for these products to free themselves from the silliness of the act’s marketing regulations, which will serve to empower consumers.

In addition to giving consumers more information through appropriate marketing and branding, removing CBD from the act would significantly increase consumer access. As it currently stands, non-intoxicating CBD products are only available via outlets that are licensed to sell cannabis.

This is problematic because for many consumers, the rollout of storefronts has been horrendous, with the government-run online alternatives taking days to deliver product. Removing CBD from the act would, overnight, allow for these products to be sold alongside other natural health products. It would also allow for products to become available in cities and towns that made the misguided decision to ban cannabis retail within their boundaries, as in Ontario. Increasing points of sale for CBD products would increase consumer access, which could help steer people away from the black market alternatives that currently exist.

Whether in co-operation with Andrew Scheer’s Conservatives, or Jagmeet Singh’s NDP, Trudeau needs to make changes to CBD regulations. Removing CBD from the act would be simple, and would actually be in line with concessions Health Canada has already made.

When the new regulations were announced for edibles, extracts and topicals, Health Canada explained that the excise tax would only be applied based on THC level, which means that CBD topicals, edibles or extracts wouldn’t come with any excise tax whatsoever. Removing CBD from the act would be a straightforward and consistent continuation of that regulatory correction. Most importantly, it would be a correction that would benefit consumers nationwide.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Yahoo Finance

Ontario to allow cannabis retailers to sell online and over the phone

Cannabis retailers will soon be able to sell products online or over the phone for in-store pick-up as the Ontario government adopts a “click-and-connect” sales model to expand access to legal marijuana.

Finance Minister Rod Phillips announced the proposed changes in the government’s fall economic statement Wednesday, saying they will decrease waits for cannabis and help combat the black market.

The shift comes as the Progressive Conservative government pledges to lift a cap it imposed on the number of cannabis stores in Ontario.

“All of the provincial jurisdictions are learning and trying to make sure that we take the best approach,” Phillips said. “Our priorities are getting rid of black market cannabis and safety in our communities.”

The government had initially said there would be no cap on the number of retail pot shops after cannabis was legalized. That decision marked a change of course from the previous Liberal government, which created the Ontario Cannabis Store and had planned to tightly control cannabis sales through government-owned stores similar to the LCBO.

But a supply shortage prompted the Tory government last December to cap the initial number of pot retail licences to just 25 so operators would be able to open.

The number of legal pot outlets in Ontario is increasing from 25 to 75 this fall.

The government also said Wednesday it will allow licensed producers to have retail stores on each of their production sites to further increase access.

The Tories had planned to allow that after coming to power in 2018 but did not enact the necessary regulations when the supply shortage caused them to cap the number of retail stores.

The government said Wednesday it will amend legislation and provincial regulations to make the changes but has given no immediate timeline when they will take effect.

Omar Yar Khan, a vice president at strategy firm Hill+Knowlton who advises cannabis sector clients, said the changes will help encourage customers to move from the black market to legal retailers.

“In an era where customers are used to an Amazon Prime experience … anything the government can do to allow these legal markets to reach consumers on channels they’re already on is a step in the right direction,” he said.

Khan said the government needs to uncap the retail market if it wants to continue to fight the illicit market.

“They need to move fast on that, and I think they will,” he said.

One consumer advocacy group praised the move towards “click-and-connect” sales but said the government could have gone further.

“It makes the legal market more consumer-friendly by increasing access and allowing consumers to place orders and pick them up … but it would be that much better if they coupled that with the ability for stores to provide deliver services,” said David Clement, manager of North American affairs for the Consumer Choice Center.

Clement said the changes that allow pot producers to open retail space could create a tourism industry around cannabis.

“If you go to brewery or a distillery, often you can take a tour or talk to the master brewer,” he said. “That on-site selling opportunity has been used to provide consumers with other experiences they otherwise wouldn’t have.”

This report by The Canadian Press was first published on Nov, 6th. I was posted on Yahoo Finance here.

FOR MORE INFORMATION ON SMAT CANNABIS POLICIES CLICK HERE

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Cannabis Plant

The green rush is already here and we need smart cannabis policy to direct it

This week, 60 Minutes ran a report on the failure of cannabis policy in California, specifically the marijuana-rich region of the Emerald Triangle. Though California legalized cannabis beginning in 2017, the region has created a special conundrum for law enforcement and regulators.

The northwestern region of the state, with its ideal growing climate, grows an estimated 70% of the nation’s cannabis. A good chunk of that, as you can guess, is sold illicitly in states where cannabis is not yet legal, recreationally, medically, or otherwise. 

Much more, 78% of all cannabis sold in California is estimated to be grown illegally, beyond the reach of taxes and regulations. Police have seized more than $30 million worth of cannabis, and are spending more time policing cannabis now than when it was illegal. It’s a disaster.

On a recent trip to New York, I saw California brands and products for sale in an illegal dispensary just off Times Square. Supply is liquid and flexible, even if the regulations are not.

And herein lies the problem.

The impressive growth of the national black market of THC cannabis is enabled by its legality in states like California, Colorado, Oregon, and Washington, but cemented by burdensome regulation and taxes that discourage consumers from using the legal market.

That’s why we need to transition urgently to smart cannabis policy, one that encourages competition, entrepreneurship, avoids red tape, and eradicates the black market.

Consumers know why current policies have failed. States, counties, and municipalities view cannabis as a cash crop for public budgets rather than a new consumer product. High taxes at all levels of production and sale, as well as expensive fees, licenses, and local prohibitions on dispensaries make it a racket.

Comparing prices alone easily nudges consumers to buy the cheaper, illicit products. The same issues plague Canada, which legalized cannabis just one year ago, but where 42% of cannabis purchases are outside the legal system. That’s a problem no one in government is addressing, much less discussing.

The regulatory burden faced by growers and retailers alike erects immense barriers to entry, practically guaranteeing the emergence of a new generation of scofflaws not seen since the days of Prohibition. This enables low-quality and sometimes harmful products to reach consumers, without significant testing or verification for pesticides or other chemicals.

California’s problems will soon migrate to Massachusetts and Michigan, cobbling together their regulatory regimes to tackle the green rush but not adapting the lessons learned from the western experience.

The culprit isn’t regulation or taxation per se, but rather an unbalanced and uninformed cannabis policy that puts the state’s tax earnings ahead of the consumer experience.

The same issues are beginning to plague the CBD and hemp market, the non-intoxicating cannabis derivatives quietly legalized via the 2018 Farm Bill. 

With little to no clarity from the FDA, states such as North Carolina will ban different forms of CBD, much to the detriment of farmers converting millions of dollars’ worth of fields to hemp production, and to consumers relying on CBD to address anxiety, pain relief, and depression. This is a national problem, rather than limited to states with recreational cannabis markets.

This is compounded by the DEA’s Schedule 1 classification of cannabis, more severe than opioids or cocaine, making it illegal for legal cannabis firms to establish legitimate bank accounts, take out loans, and offer public shares of their businesses. Not to mention the myriad of issues that force dispensaries to deal in cash for transactions, tax payments, and equipment procurement.

Thankfully, both Republicans and Democrats in Congress are close to passing the SAFE Banking Act to alleviate these concerns. But bad cannabis policy at the state and local levels still exists. And that’s bad for consumers and entrepreneurs alike.

Nascent cannabis companies should be able to establish brands and consumer loyalty, comply with reasonable and smart regulation, and not face unreasonable tax burdens. That will make the experience much better for consumers, and it’s the only way to eradicate the black market and ensure smart cannabis policy.

By Yaël Ossowski

Yaël Ossowski is a writer, consumer advocate, and deputy director at the Consumer Choice Center.

$1.1 billion worth of cannabis sold in Canada’s first year of legalization

One year after the legalization of recreational cannabis, Cannabis Benchmarks, a company that tracks cannabis prices, estimates that Canadian licensed producers have sold approximately 1.1 billion dollars worth of pot in the past 12 months, the equivalent to 105,000 kilograms—enough to fill almost two rail freight cars.

According to Statistics Canada, licensed retail outlets sold more than $100 million worth of pot in July, the fifth straight month that sales hit an all-time high.

However, some industry analysts believe those numbers would be much higher if not for the many stumbling blocks the industry has encountered in the first year of legalization. They cite several problems, ranging from non-compliant packaging to the failure of some producers to increase cultivation capacity in time to meet demand. But according to many analysts, the number one problem has been the regulators.

An article published by the Motley Fool, a financial services company, said federal regulators were not prepared to handle legalization of recreational cannabis. Health Canada had more than 800 cultivation, processing, and sales applications when the year started, but took several months or more to review them, the article stated. That “kept cultivators, processors, and retailers waiting in the wings to meet [consumer] demand.”

“There are many risks involved in overseeing cannabis and Health Canada tries to manage risk,” Alanna Sokic, a senior consultant for Global Public Affairs, told Leafly.  “The industry runs at breakneck speed and government does not.”

“Canadian licensed producers have sold approximately $1.1 billion worth of cannabis in the past 12 months, the equivalent to 105,000 kilograms—enough to fill almost two rail freight cars.”

Cannabis Benchmarks

Sales figures should be higher

Analysts have criticized some provinces for being slow to approve retail licenses. In Ontario and Quebec, for example, there are so few brick-and-mortar stores that many consumers are faced with the prospect of buying cannabis online—an unappealing option for the many consumers who want to see and smell their product before buying it legally—or getting it on the illicit market.

Many of them have chosen the latter route. The amount of legal cannabis Canadians have purchased in the past year (105,000 kilos) represents just 11.4% of the total amount they are thought to consume annually.

Canada’s most populous province has completely botched the rollout of the cannabis retail market according to analysts. After Doug Ford became premier of Ontario in June 2018, he announced that his government would award cannabis retail licenses through a lottery system. Two lotteries have been held so far.

This system has been fraught with problems, including inexperienced winners and concerns that some of them have sold their licenses on the illicit market.

“If you needed a brain surgeon, would you pick one through a lottery? Cannabis retail is best left to those who are knowledgeable and reliable,” BCMI Cannabis Report author Chris Damas told Leafly.

There are also indications the lottery system has been gamed by big players. A physical address was required for each entry. In the second lottery, in August, the average number of entries per each winning address was 24. One address was entered into the lottery 173 times. Each entry cost $75.

The amount of legal cannabis Canadians have purchased in the past year (105,000 kilos) represents just 11.4% of the total amount they are thought to consume annually.

Some of the applicants are so unhappy with the system they have taken their case to court. Eleven of them won the right to apply for a retail license through the second lottery but were later disqualified for not providing required documents by the regulator’s deadline. They responded by asking the court for a judicial review. The province’s plan to hold another lottery was suspended until Sept. 27, when the court dismissed the applicants’ request.

There are now just 24 retail outlets in a province that has a population of more than 14 million. “Ontario could support a thousand stores—and that’s a conservative estimate,” Damas told Leafly. “The provincial government blew it. If Ontario was punching at the weight it should be, Canadian sales numbers would be much higher.”

The Ford government attributes the slow rollout of retail to supply issues at the federal level. They say stores might go out of business if they open while there is limited cannabis supply. But as David Clement of the Consumer Choice Center stated in The Globe and Mail, the province doesn’t have the same approach when it comes to granting alcohol licenses for restaurants, bars, or clubs even though there is a high failure rate (60%) for these businesses.

Also, all the provinces are dealing with the same supply issues, yet some have done a much better job of establishing a cannabis retail market. For example, there are more than 300 retail outlets in Alberta, even though the province’s population is just 4.3 million—less than a third the size of Ontario’s population. Alberta outlets sold $124 million dollars’ worth of cannabis in the first eight months of legalization while Ontario outlets sold $121 million.

They key to Alberta’s success is its comparatively free-market regime, say analysts. The province’s regulatory body is the sole distributor of recreational cannabis just as it is in Ontario. However, in Alberta, anyone can apply for a license to open up a retail location. The opening of retail outlets is driven by market demand.

‘Gong show’ will get sorted out

“Sales numbers are what can be expected when some provinces (in the Prairies) embrace a free-market model and others don’t,” Damas said. “It has been a fiasco in certain provinces,” he said, referring to Ontario as well as Quebec, which has 22 stores and a population of eight million.

But Damas and other analysts are optimistic about the future of cannabis retail in Canada. Economist Trevor Tombe at the University of Calgary said in a tweet that “the gong show” in Ontario will get sorted out. Indeed, the province just announced it was launching consultations aimed at getting the private sector more involved in cannabis storage and delivery.

“Sales numbers are what can be expected when some provinces (in the Prairies) embrace a free-market model and others don’t.”

Chris Damas, BCMI Cannabis Report author

“If you look across Canada you will see a patchwork of regulation. Some provinces are performing much better than others because they have prioritized access,” Sokic told Leafly. “In the past year, some lessons have been learned. Provinces who haven’t prioritized market access are considering it so that they can accomplish their objectives. I think the future looks bright.”

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

What should consumers know about cannabis edibles?

In the second season of the Netflix series Rotten, there is an entire episode exploring the world of cannabis edibles. It is highly recommended.

The documentary itself does a great job uncovering the latest innovations, the legal hurdles, and many questions left for consumers who want to try cannabis edibles where they’re legal.

Going beyond the documentary, what should consumers know about cannabis edibles?

Check out Rotten Season Two: “High on Edibles“

First, we should make clear that markets are evolving as quick as the laws are being written.

Cannabis products containing THC, the actual psychoactive compound, remain a Schedule 1 drug per the Controlled Substances Act. This means the federal government believes cannabis (all strains) has a high potential for abuse, has no accepted medical use, and there is a lack of safety even under medical supervision.

However, since 2018’s Farm Bill, industrial hemp has been legal, opening the door for cannabis strains that contain the non-psychoactive CBD to be sold around the country. I testified on this important subject at an FDA hearing this spring.

Therefore, though we’re mostly discussing THC edibles, there is also a booming market for CBD edibles in stores throughout the United States, the legality of which seems to be supported by the legalization of industrial hemp. It is a gray zone that has not been clarified by any federal law.

Therefore, for THC edibles, they’re only technically legal for general consumers in the eleven U.S. states (including D.C.) that have legalized recreational cannabis.

Though the states differ in regulation, the most mature markets are in California, Oregon, Washington, and Nevada, which have fully functioning legal markets that include edible cannabis products, topicals, and cannabis extracts.

CANADA

Canada legalized recreational cannabis in October 2018, but the first phase only included cannabis flowers, to be smoked or cooked into edibles by consumers.

My colleague David Clement has written about the problematic laws in Canada, which differ by province and will only allow edible products this year.

Though cannabis edibles and extracts will be technically legal by Oct. 17, 2019 (nearly a year after legalization), Health Canada rules require companies to inform the federal government of their plans starting on that date, at least 60 days before they can sell. So it’ll be December before we see any edibles, topicals, and extracts on Canadian shelves.

EUROPE

The only jurisdiction that has any legal market in (THC) cannabis is in the Netherlands, but it is far from a commercial market. Because the cultivation and shipment of cannabis are technically illegal, the Dutch system is actually also a gray area, one in which the government tolerates cannabis sales but gives very little legal legitimacy.

That said, many European countries have shops that sell edible CBD products, usually containing less than 0.3% THC in most countries. And several countries such as Germany and Spain do offer medical cannabis, including edibles, but only in highly regulated circumstances.

UNITED STATES

Returning to the legal THC edible markets for cannabis in the United States, and to the most mature markets mentioned above, legal products in these states have grown in popularity in the years since legislation.

The latest figures from 2017 in Colorado, for example, show that edibles and concentrates now make up 36% of cannabis sales, up from just 30.5% two years prior.

These edibles range in potency and form, but often are found in gummies, cakes, cookies, lollipops, capsules, chocolates, drinks, and much more. Cannabis “shake” – pre-ground flower – is often sold to be infused with food at home.

According to the market firm CBD Analytics, gummies are now the most popular edible item found in cannabis dispensaries. In the first four months of 2019, sales of gummies alone in California, Oregon, and Colorado amounted to more than $115 million.

The states differ in how many milligrams of THC they allow, but following Colorado’s rules, each package contains 10mg or 100mg, 10mg being the standard “dose”. It is recommended that newcomers not ingest more than 5mg during their first try. Too high of a dose will result in a strong effect on the user.

TESTING

Testing of edibles is a requirement in these jurisdictions, mostly for potency, dangerous substances, and pesticides, and the results of these tests must be made available to both regulators and consumers. Thus far, most testing is conducted by private labs, which must be licensed by the states.

TAXATION

Of course, THC cannabis products are highly taxed in the jurisdictions where they are legal. The average excise tax is 15%, but then one must also add significant sales taxes as well. The Tax Foundation keeps great documentation on the competing tax rates on cannabis in states where it is legal.

It is recommended that these jurisdictions keep taxation moderate, lest they push consumers back into the illegal market because of too high prices.

ADVERTISING AND BRANDING

Laws on advertising and banding also are quite different between legal jurisdictions for these products. As we have noted in our Policy Primer on Smart Cannabis Policy, Washington State has some of the better laws when it comes to how much information companies can share or how much branding they’re allowed to put on the packages for edibles.

More branding and the ability to advertise make it possible for consumers to establish loyalty and root out bad apples. They also give consumers better information on the potency of edibles, the form, tastes, and what the products are best used for. That’s crucial for consumer choice.

WHAT SHOULD CONSUMERS KNOW?

  • Only a handful of U.S. states have legal THC cannabis edible markets
  • CBD edibles, thanks to the 2018 Farm Bill, are now widely available around the country
  • Cannabis edibles range in potency and form
  • Testing of cannabis edibles is highly regulated and must be conducted to check for potency, dangerous substances, and pesticides
  • Taxes are generally very high, but should be moderate to encourage the legal market
  • Advertising and branding rules sometimes limit what companies are allowed to tell consumers

Opinion: The Liberals are blowing smoke with claim they ‘wiped out’ half of illegal cannabis market

Opinion: About 80% of all cannabis bought in Canada is being purchased on the illegal market, far from the 50% figure claimed

The federal election is just a few months away, which means Canadians are going to be bombarded with claims from the government about its apparent successes, while at the same time hearing endless counter arguments from opposition parties. In this sea of endless noise, it can be difficult to parse out where the federal government actually stands on its claims, and whether the opposition parties have legitimate grievances, or are just opposing for the sake of opposing.

When election day does come, Canada will be a year in to cannabis legalization, which gives us a good opportunity to reflect on how things have gone thus far. Legalization is smart policy overall. That said, at nearly the one-year mark, there is lots to reflect on regarding Canada’s cannabis legalization experiment.

Just last week new StatsCan figures came out in regards to consumer behaviour and cannabis usage. Some interesting facts emerged, like the fact that men are two times more likely to consume cannabis than women are, and that men are more likely to use cannabis for non-medicinal reasons. In addition to usage patterns, StatsCan revealed that 48 per cent of cannabis consumers surveyed said they purchased some of their cannabis in the legal market. As soon as the report came out, Trudeau’s right-hand man, Gerry Butts, and senior policy adviser Tyler Meredith, were quick to pat themselves on the back for “wiping out half of the illegal market.” Wiping out half of the illegal market would be incredible, and something worth congratulating, if it were true.

The first issue with their claim is that Canadians surveyed had to self report, meaning they had to admit to committing an illegal act in order to fall into the “purchased illegally” category. Anyone who has taken an introductory research methods course knows that this percentage is almost certainly undervalued, with the real percentage of illegal purchasers being much higher. In fact, StatsCan data from the same report hints at that very fact, with 37 per cent of consumers saying they got their cannabis from family and friends. Facing the reality of admitting to a crime, it is likely that many of those surveyed opted for the family and friends option, over admitting to making illegal purchases. Ironically, the report cited by Butts and company actually explains that less than 30 per cent of cannabis consumers purchase exclusively in the legal market.

Beside the issue of self reporting, both Butts and Meredith made their 50 per cent claim based on data that doesn’t actually mean that half the illegal market is gone. It is fantastic that nearly 50 per cent of consumers self reportedly purchased some cannabis legally, however, that figure doesn’t actually mean that half the illegal market has been wiped out. This type of analysis is incredibly sloppy, because it doesn’t take into account the quantity of cannabis purchased. The past StatsCan quarterly snapshot showed that Canadians spent $5.9 billion on cannabis, with the black market accounting for $4.7 billion of that total. Thus, approximately 80 per cent of all cannabis bought in Canada was done so in the illegal market, which is far off from the 50 per cent figure being touted by Liberal party brass.

Canadians are smart enough to know when their government is telling half truths for the purpose of misdirection 

There are a variety of reasons why the illegal market is still persistent in post-legalization Canada. Those reasons largely come down to three factors: price, access and product variability. For each of those factors, the federal government failed to put consumers first when creating Canada’s legal framework. For price, it has been well documented that illegal cannabis is getting cheaper, while legal cannabis is heading in the opposite direction. The price gap between legal and illegal cannabis is largely a combination of poor federal policy compounded by provincial mistakes. Legal cannabis, at the federal level, has GST applied to it, a 10 per cent excise tax, and half a billion dollars in compliance fees for producers. These taxes and fees, in addition to provincial boutique taxes, are in large part why legal cannabis is upwards of double the price of illegal cannabis.

For access, the federal government’s overly cautious approach has significantly hampered the consumer experience for those who do purchase legally. Anyone who has been into a legal store right away sees the sterile nature of Canada’s legal market. Products can’t be seen in advance by consumers, and when they do get their product, their purchase is in overly paternalistic plain packaging. On top of that, the marketing and advertising restrictions for legal cannabis more closely mirror tobacco restrictions, when they should be more in line with how alcohol is marketed. All of these federal rules treat adult consumers like children, and take the fun out of the legal industry. This matters because the legal industry has to be more attractive than the illegal industry, and it’s hard for the legal industry to do so with its hands tied behind its back.

A cannabis package with a child-resistant zipper=like opening. Supplied

Lastly, is product variability. The federal government made the mistake of legalizing only dried cannabis and oils on legalization day. It misguidedly gave itself a one-year buffer to roll out edibles, extracts and topicals. Failing to legalize all product varieties only serves the black market. Simply put, the more variety in products available to consumers on the legal market, the easier it is to pull consumers away from the black market. Again, stamping out the black market, like the Liberals claim they have, depends on making the legal market more attractive, but that becomes nearly impossible when federal policy is wrapped in paternalistic nonsense.

The federal election is on the horizon, and the SNC-Lavalin scandal is back in full force. Fictional ad man Don Draper once said, “if you don’t like what people are saying about you, change the conversation.” This appears to be what Liberal party brass are trying to do with their braggadocious cannabis claims. The problem is that Canadians are smart enough to know when their government is telling half truths for the purpose of misdirection. This is exactly what is happening, and we can all see it.

David Clement is the North American Affairs Manager with the Consumer Choice Center.

Originally published here

Luxembourg to be first European country to legalise cannabis

Two representatives of the Consumer Choice Centre, a US-based NGO, travelled to Luxembourg in April to offer their advice on legislation.

One area of contention is whether to ban the use of cannabis in public, which risks discriminating against tenants and people of limited means. The officials recommended allowing use of the drug in specific public areas.

Read more here

Quick and smart fixes for Canada’s cannabis mess

Curbing the black market for cannabis is something that everyone should endorse, regardless of their view on legalization.

It is far better to have consumers purchasing cannabis legally, as opposed to having them buy the product illegally, from sources possibly tied to organized crime. Unfortunately, new data from Statistics Canada shows that the price gap between the illegal market and the legal market is getting worse.

In the past three months, the price of a gram of cannabis purchased illegally has fallen from $6.23 to $5.93. Over that same time period, the average price of a gram of legally purchased cannabis rose from $10.21 to $10.65. A price difference of $4.72 is a huge problem, especially for those of us that want legalization to succeed, and the black market stamped out.

As such, there are largely two factors that determine whether or not the legal market will outshine the black market. The first, and most obvious, is the price, while the second is consumer access.

In order for consumers to be encouraged to buy cannabis legally, especially if they were buying cannabis prior to legalization, pricing in the legal market needs to be competitive with black market prices. Excise taxes, sales taxes, additional regional taxes, and onerous production regulations and fees quickly drive up the price of legal cannabis.

The illegal market, not having to comply with these taxes, fees, and regulations, gets the upper hand, but it doesn’t mean that the legal market won’t ever be able to compete.

There are some simple changes that can be made to drive down legal prices. In regards to excise taxes, the federal government could amend the tax formula to eliminate the minimum tax amount and simply tax cannabis on its wholesale value. Getting rid of the $1/gram minimum (combined federal and provincial) would immediately allow for discount products to hit the shelves, which could attract price-sensitive consumers.

The Federal government could also change the production regulations for licensed producers. Pivoting the industry to a food-grade, as opposed to pharmaceutical grade, regulatory regime would immediately help lower costs, which would be passed on to consumers via lower prices.

The second major factor is access.

The legal market needs to be as accessible, or more accessible, than the black market. This is increasingly true for cannabis consumers who were buying the product illegally prior to legalization. In order to break the purchasing pattern of those consumers, the legal market has to have something to offer that the black market doesn’t.

Changes to access largely falls on provincial governments, as they are the government bodies that handle online availability, storefront licensing, and consumption rules.

Provinces could expand consumer access by increasing and uncapping the number of storefronts, and utilize the private sector where possible. Provinces like Ontario should immediately uncap their licensing process so that the amount of storefronts available to consumers reflects what the market can bare.

As supply increases domestically and catches up to demand, it will be important for consumers to have access to that new supply through readily available storefronts. Uncapped licensing, with private stores where possible, allows for that change to be as dynamic and consumer-centric as possible, which is a big win in regards to access.

In addition to increasing storefronts, provinces across Canada should follow the lead of Manitoba and allow for private cannabis e-commerce and delivery. Consumers in Winnipeg can actually get same-day delivery from licensed dispensaries, something that is illegal in Ontario. Allowing for dispensaries to deliver, or for regulated third parties to deliver, significantly increases consumer access to the point where it can be as accessible as black market dealers.

The last, and arguably most impactful change to consumer access would be to make commercial consumption legal. By the end of the year, new non-smokable cannabis products will hit the market, including beverages and edibles. Consumers should be able to consume those products in commercial settings like bars, restaurants, lounges, and clubs.

Provinces should amend their current liquor licensing procedures to include cannabis products, and consumers should be able to purchase those products like they do beer, wine, or spirits. Expanding cannabis access to commercial settings would quickly provide consumers with something that the illegal market never could: a controlled and permitted space to consume. Treating these new cannabis products like alcohol and allowing commercial sale and consumption would considerably increase consumer access by creating regulated access points in every community.

Smart cannabis policy is a policy that puts the consumer first when creating rules and regulations. If the government fails to draft policies with consumers in mind, the black market will continue to thrive. Addressing how our current regulatory regime inflates prices, and dampers access would go a long way towards actually making legalization a success.

The entire world is watching how we regulate cannabis. Let’s do it right for Canada’s sake.

Originally published here


Legal weed is a lot more expensive than your dealer: Statistics Canada

“The data from Stats Can is troubling, because it shows that the legal market is getting less competitive over time,” said David Clement, the North American affairs manager at Consumer Choice Center. “Luckily there are some simple solutions that could be enacted to help the legal market compete when it comes to price. The federal government could quickly get rid of the minimum tax amount, and simply tax cannabis on its wholesale value. This would immediately allow for discount products to hit the shelves, which will put downward pressure on prices.”

In addition to changing the excise tax formula, Clement said the government could change production regulations that are holding back industry efficiency.

“Shifting production regulations to be in line with food-grade rules, as opposed to pharmaceutical-grade restrictions, would go a long way in terms of reducing costs, which are passed on to consumers through lower prices,” he said.

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