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.