Canada's upper house of parliament hasapproveda
revised bill to legalize recreational marijuana within eight to
12 weeks.
As the first G7 economy to fully legalize pot, Canada's
regulatory rollout will be closely watched by other nations
considering the same path - and by global investors, who have
already poured billions into Canadian cannabis firms.
Canada to approve legal marijuana sales; pot shops could be
open by late summer
The Canadian Senate, the members of which are appointed rather than
elected, is likely to OK a legalization measure Thursday June
7th after years of quiet study and discussion. After House
approval, Prime Minister Justin Trudeau’s government expects to
launch legal sales as soon as 10 to 12 weeks from then
Canada’s approach differs from that taken in the USA, where nine
states and the District of Columbia have legalized cannabis, but
there hasn't been a substantive national discussion about the widely
used drug. As part of legalization, the Canadian government will
probably inform citizens that admitting to marijuana use might get
them barred from crossing the border into the USA, which classifies
cannabis as a Schedule 1 drug with "no currently accepted medical
use and a high potential for abuse," according to the Drug
Enforcement Administration.
“We’ve very much learned from the early mistakes made by some U.S.
states and other jurisdictions,” said Canadian Sen. Tony Dean, an
independent who sponsored the bill in the Senate. “We know we have a
national challenge with cannabis. We have some of the highest youth
consumption rates in the world, an illegal cannabis market worth
upward of $6 billion annually, we know it’s harmful for kids,
especially younger kids … and we had a government that wanted to
tackle those issues.”
Trudeau and his Liberal Party included marijuana legalization as
part of their 2015 campaign, and his government has worked toward
creating a structure for recreational cannabis sales and consumption
since taking office. Medical marijuana has been legal in Canada
since 2001, and many U.S.-based cannabis companies have jockeyed for
position in that market with an eye toward broader legalization.
Recreational marijuana sales in Canada could be worth $3.3 billion
by 2027, in part because businesses will find it easier to work
nationally, instead of piecemeal like in the USA. Uruguay is the
only other country to legalize marijuana; many countries have
decriminalized it but prohibit sales.
Canada’s regulations, which are being finalized, would permit people
as young as 18 to buy marijuana from regulated stores and to grow
small amounts at home, depending upon which province or territory
they live in. The draft rules call for setting aggressive targets
for reducing youth cannabis use, creating national standards for
potency testing and packaging and setting tax rates low enough to
undercut the black market.
By legalizing marijuana at the federal level, the Canadian
government sets the stage for more traditional investment while
assuring entrepreneurs they can use banks like any other business.
In the USA, many cannabis companies must conduct their operations
with cash because banks worry the federal government will target
them as drug traffickers.
“Canada is creating a normal industry. What we have in the United
States is a very abnormal industry,” said Roy Bingham, the CEO and
co-founder of cannabis data firm BDS Analytics. “In Canada, you see
tobacco, alcohol, pharmaceutical companies, all these mainstream
industries interested in getting involved.”
Bingham said many European countries are closely watching how
legalization rolls out in Canada, even though California has more
residents and a bigger marijuana marketplace: “It’s a respectable,
well-regulated country with a democracy that people admire.”
That’s bad news to Kevin Sabet, who runs the U.S.-based
anti-legalization group Smart Approaches to Marijuana. Sabet has
consulted with Trudeau’s government about his concerns over
marijuana edibles, potency and the speed at which the country is
moving toward broader cannabis access. His group warns that
widespread marijuana legalization will create an industry similar
to “Big Tobacco” with untold public health costs.
“They’re being more deliberative than the U.S., yes, but that
doesn’t mean they have the secret sauce,” Sabet said. “There are
considerable concerns with how Canada is normalizing marijuana.”
The plan discussed by the Canadian Senate this week lacks one major
policy point many advocates pushed for: expunging the criminal
records of people convicted for minor marijuana crimes. In
California, which launched legal sales Jan. 1, some
prosecutors wiped away those records, and prosecutors in
Seattle seek to do the same.
Dean said the Trudeau government assured the Senate it would address
the issue of criminal records once the law was in place. He said
that after decades of prohibition, Canada’s government is ready to
treat marijuana and its users differently.