Cannabis in Canada

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"Canada/Cannabis Day", 2014

In Canada as of early 2017, cannabis – usually referred to as marihuana or marijuana – is legal only for medicinal purposes and only under conditions outlined in the Access to Cannabis for Medical Purposes Regulations (ACMPR).[1] issued by Health Canada. The cultivation of the hemp plant of the genus Cannabis (family Cannabaceae) is currently legal in Canada for seed, grain and fibre production only under licences issued by Health Canada.[2]

Cannabis was first banned in Canada in 1923, with regulated medical cannabis becoming legal in 2001. In response to popular opinion,[3] Justin Trudeau, the leader of the Liberal Party of Canada committed to decriminalizing cannabis for personal use while campaigning during the Canadian federal election, 2015. The Liberals won the election with 184 seats, allowing the party to form a majority government with Trudeau as Prime Minister.[4] The plan was to remove cannabis possession for personal consumption from the Controlled Drugs and Substances Act; however, new laws would be enacted for greater punishment of those convicted of supplying cannabis to minors and impairment while driving a motor vehicle.[5] In November 2015, Justice Minister Jody Wilson-Raybould said that she and the ministers of Health and Public Safety were working on specifics as to the legislation.[6]

The final wording was still under discussion in late March 2017, but a probable date for the official effect of the legislation was widely publicized as 1 July 2018. News reports indicated that the provinces will have the power to determine the method of distribution and sale as well as the legal age for cannabis use.[7]

History[edit]

Cannabis has been illegal since it was added to the country's Confidential Restricted List in 1923 under the Narcotics Drug Act Amendment Bill after a vague reference to a "new drug" during a late night session of the House of Commons on April 23, 1923.[8]According to one government official, cannabis was outlawed after the Director of the Federal Division of Narcotic Control returned from League of Nations meetings where the international control of cannabis was broached.[9]:49 Cannabis did not begin to attract official attention in Canada until the latter 1930s, and even then it was minimal.[9]:51 The first seizure of cannabis by Canadian police was not until 1937.[9]:48 Between 1946 and 1961, cannabis accounted for only 2% of all drug arrests in Canada.[9]:112

In response to the increased popularization of marijuana and the increase in criminal charges against middle class citizens, the government formed the Royal Commission of Inquiry in the Non-Medical Use of Drugs, usually referred to as the Le Dain Commission in 1969 to investigate the non-medical cannabis use in Canada.[10] The commission's 1972 report recommended removing criminal penalties for cannabis possession, though not legalization, per se. While the subsequent two federal governments discussed the recommendation, no steps were actually taken to change legislation.[11]

Steps to legalization[edit]

After he was elected Prime Minister in 2015, the first significant step that Justin Trudeau took was the creation of a federal-provincial-territorial task force to discuss a jointly suitable process for the legalization of cannabis possession for casual use. This Task Force on Marijuana Legalization and Regulation released a 106-page report to the public on 13 December 2016, with various recommendations. Those are being considered by the federal and provincial governments but they are not binding.[12] While the legislation is expected to be introduced in spring 2017, sales for recreational use will probably not commence until January 2018 according to Canada's Parliamentary Budget Officer.[13] Subsequently, the substance will remain controlled: sold only at government licensed retailers, and grown only by licensed producers.[14][15] During the federal election campaign, the Liberals had promised "new, stronger laws" against sales to minors, driving while impaired and sales through channels not specifically authorized to do so.[16]

Until legislation is enacted, marijuana remains illegal (except with a physician's prescription, for medical purposes), as Prime Minister Justin Trudeau reminded police forces across the country in late 2016. He insisted that they "enforce the law": criminally charge illegal storefront dispensaries. Trudeau also explained that the intent of the legislation is not to encourage recreational use of cannabis. The intent is "to better protect our kids from the easy access they have right now to marijuana [and] to remove the criminal elements that were profiting from marijuana," he told the Toronto Star on 2 December 2016.[17]

Police forces took the Prime Minister seriously and in March 2017 raided five locations of the Cannabis Culture retailer in Toronto, one in Vancouver, BC and another in Hamilton, Ontario. They also searched homes in Toronto, Stoney Creek and Vancouver. Multiple charges were laid against Marc and Jodie Emery, said to be "linked to" Cannabis Culture, for trafficking and other violations. Drug-related charges were laid against three others. Toronto Police told the media that the unlicensed marijuana dispensaries are linked to "high-level drug traffickers ... often tied to organized crime, given the amount of marijuana sold". The couple were released on bail with strict conditions.[18]

Public opinion[edit]

Since 1997, public opinion polls have found an increasing majority of Canadians agree with the statement, "Smoking marijuana should not be a criminal offence".[19] A June 2016 national poll conducted by Nanos Research showed that 7 in 10 Canadians are in favour of legalization.[20]

By 2006, a high percentage of the population was using cannabis, in spite of the risk of police charges for possession, and especially for selling it without the required license, according to statistics gathered by the Centre for Addiction and Mental Health. Nearly half (44%) of Canadians admit to trying it at least once; no statistics were provided as to the percentage who use it frequently. The CAMH report also indicates that by the last year of High School, nearly half (46%) of Ontario students admit to having used marijuana in the past year.[21] Naturally, the CAMH discussion includes warnings about the negative effects of cannabis. Other groups also warn about the risk, including the Canadian Automobile Association whose 2016 poll indicated that "Almost two thirds of Canadians are concerned that roads will become more dangerous [due to impairment by the drug] with the legalization of marijuana".[22]

An October 2016 national poll by Forum suggests that about five million adult Canadians now use cannabis at least once a month; this is expected to increase by 19 percent after marijuana is legalized.[23] Canaccord Genuity analysts Matt Bottomley and Neil Maruoka released a research note with a more moderate estimates as to the number of users. They predicted that approximately 3.8 million persons will be recreational users (presumably on a frequent basis) by 2021.[24] A report by Canada's Parliamentary Budget Officer (PBO) is more bullish, estimating that by 2021 some 5.2 million adults may be users.[25]

Cannabis as a commodity[edit]

Growers that currently produce marijuana are licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR). As of late 2016, there were 36 authorized producers across the country in Health Canada's list, with the vast majority located in the Province of Ontario.[26] Statistics indicate that in September 2016 nearly 100,000 Canadians had bought medical marijuana legally, a significant increase over the 30,537 in September 2015, presumably since it is becoming a mainstream drug and since supplies are becoming more readily available.[27]

The largest of these is Canopy Growth Corporation of Smiths Falls, Ontario, renamed from Tweed Marijuana Inc. in September 2015[28] after it purchased competitor Bedrocan. Subsequent acquisitions for this corporation included Vert Medical, the German cannabis distributor MedCann and a majority interest in Quebec's Groupe H.E.M.P.CA Inc. In early December 2016, Canopy announced a friendly takeover bid of another Canadian producer, Mettrum Health (CVE:MT), in anticipation of an expanding market after marijuana is legalized for recreational purposes in 2017.[29] In addition to sales in the domestic market, Canopy Growth began selling medical cannabis products in Germany and Brazil in 2016. The company was described as "one of the world's — and Canada's first — premier exporters of marijuana" by the Financial Post news organization.[30]

Canopy Growth's patient base increased by approximately 260 per cent and revenue increased by about 180 percent in the calendar year 2016 vs. 2015. The increase would have been even greater but the company had difficulty maintaining adequate stock in some high-demand categories such as mid-to-high THC level products and oils. A report by The Financial Post indicated that inventory shortfalls have been a problem for many of Canada’s licensed medical marijuana producers; this could worsen after recreational marijuana is legalized. When the year end report was released, Canopy Growth's share price fell seven percent to $12.09 on the Toronto Stock Exchange (ticker WEED). [31] The December 2016 year end report indicated a profit for the first time in the company's history (3 million in net income). Previously, Canopy Growth had been operating at a loss ($3.3 million in 2015, for example) partly because it was using funds to acquire competitors in preparation for significantly increased cannabis demand by the recreational use market expected to commence in early 2018. (The company's most recently announced acquisition is of Mettrum Health Corp., for $430 million, awaiting final regulatory approval.) In early December 2016, Reuter's survey of four market analysts had indicated a consensus rating of Buy in early December 2016.[32]

Some smaller producers have also posted "spectacular" (over 250%) gains in market value during 2016 according to Bloomberg News, including ICC International Cannabis Corp., Aphria Inc. and Aurora Cannabis Inc.[24] Some industry observers believe that the trend will continue; "speculation and investor frenzy are fuelling many of the gains". Other observers agree that marijuana company values are high but point out that "the players have real products with real sales that are growing, unlike the many dot-com firms that fed that bubble." Nonetheless, "cannabis investors chasing the Big Green Rush are playing a dangerous game," according to Dan Nicholls, Vice President of the Marijuana Index in Los Angeles. “For a first-time investor, stocks are always risky,” he said. "You can lose everything you put in, potentially, especially in a market like this."[33]

Some investment counsellors also warn clients that marijuana stocks are "very risky". According to Barry Schwartz, chief investment officer at Baskin Wealth Management in Toronto, "It's not the type of investment we’d ever make" adding that he would advise anyone who asks about investing in this sector, "don't do it".[34]

Market analysts Matt Bottomley and Neil Maruoka of Canaccord Genuity believe that approximately 3.8 million persons will be recreational users (presumably on a frequent basis) by 2021 with a potential for $6-billion of sales.[24] These analysts predicted that after legalization, there may be a "shortfall of supply in the near term" (until about 2020 perhaps) which is likely to increase the product's selling price. Their prediction was based on the government's strict standards which have resulted in few producers becoming licensed under the current system.[35] Presumably the government will relax the qualification standards to increase the number of producers who will be licensed after cannabis is legalized for recreational use but no such plans have been revealed to date.[36]

The report by the Task Force on Marijuana Legalization and Regulation recommended that cannabis growers should be licensed at a federal level, separately from the producers of medical marijuana. The expert panel also recommended that the process ensure competition by licensing both large and small producers. While licensing should be federal, each of the provinces should be allowed to determine how and where the product will be sold.[37]

After the probable date of legalization (1 July 2018) became well publicized, industry analysts reported that some of the 40 producers currently licensed for medical marijuana, including Aurora Cannabis, were already increasing the capacity of their operations for future sales to the distributors of recreational cannabis.[38] Reports from reliable sources at that time confirmed that the provinces will have the power to determine the method of distribution and the types of retailers who will be licensed to make sales.[39]

Retail sales options[edit]

After the federal government announced that marijuana would be legalized, Ontario Premier Kathleen Wynne commented that the Liquor Control Board of Ontario (LCBO) stores might be the ideal distribution network for stocking, controlling and selling such products.[40] The Union representing LCBO staff has also been lobbying for this process. However, the Task Force specifically recommended against selling cannabis in conjunction with alcohol.[41] If that recommendation is accepted by the federal government, and that is not mandatory, the suggestion by Wynne will not be considered by the legislators.[42]

Naturally, the substance will be taxed, producing revenues of $618 million per year initially and eventually, billions, according to a report by Canada's Parliamentary Budget Officer (PBO).[25] (A recent government estimate indicates that the illegal marijuana industry is worth $7-billion per year.)[43] The PBO report predicts that the tax revenue will be split 60/40 between the provincial and federal governments. The Task Force report recommended that high-potency cannabis (with a high THC content) be taxed at a higher level than the conventional product to make it less attractive to consumers.[44][45]

In late March 2017, reliable sources confirmed that the legislation will give the provinces the power to determine the method of distribution and sale.[46]

References[edit]

  1. ^ "Access to Cannabis for Medical Purposes Regulations". laws-lois.justice.gc.ca/. Retrieved 2017-03-20. 
  2. ^ "Industrial Hemp Regulation Program FAQ". Health Canada. November 2012. Retrieved 2013-10-30. 
  3. ^ Cain, Patrick (October 12, 2016). "Canada will see 900,000 new pot smokers under legalization, poll implies". Global News. Global News, a division of Corus Entertainment Inc. Retrieved 4 February 2017. 
  4. ^ Zurcher, Anthony (20 October 2015). "Trudeau brings Liberals back on top". BBC News. Retrieved 4 February 2017. 
  5. ^ Bronskill, Jim (17 December 2015). "Tax on legalized pot won't be a cash cow: PM". CTV News. Bell Media. Retrieved 23 December 2015. 
  6. ^ Lunn, Susan (28 November 2015). "'World is going to be looking to Canada' on pot legalization, Jane Philpott says". CBC News. CBC/Radio Canada. Retrieved 23 December 2015. 
  7. ^ Cochrane, David (26 March 2017). "Liberals to announce marijuana will be legal by July 1, 2018". CBC. CBC. Retrieved 28 March 2017. 
  8. ^ Daniel, Schartz (3 May 2014). "Marijuana was criminalized in 1923, but why?". CBC News. Retrieved 29 July 2014. The only mention of the proposed changes to the schedule recorded in Hansard was on April 23, when Beland told the House of Commons, "There is a new drug in the schedule." 
  9. ^ a b c d Carstairs, Catherine (2000). ""Hop Heads and Hypes": Drug Use, Regulation and Resistance in Canada, 1920–1961" (PDF). Phd dissertation. Universityof Toronto. Retrieved 2008-01-02. 
  10. ^ Robert Rutherdale; Magda Fahrni (1 July 2008). Creating Postwar Canada: Community, Diversity, and Dissent, 1945–75. UBC Press. pp. 318–. ISBN 978-0-7748-5815-1. 
  11. ^ Hathaway, Andrew (2009). "The Legal History and Cultural Experience of Cannabis". Here to Help. Here to Help. Retrieved 16 December 2016. In Canada, the government rejected the Le Dain proposal to remove criminal penalties for cannabis possession. 
  12. ^ The Canadian Press (13 December 2016). "Task force recommends setting 18 as minimum age for pot purchases". BNN. Bell Media. Retrieved 13 December 2016. recreational marijuana should not be sold in the same location as alcohol or tobacco 
  13. ^ Cullen, Catherine (1 November 2016). "Legal marijuana could raise federal cash — but not right away, PBO says". CBC News. CBC. Retrieved 4 December 2016. as early as January 2018 
  14. ^ Wright, Lisa (16 November 2016). "Shoppers Drug Mart right spot to sell medicinal pot: poll". Toronto Star. Toronto. Retrieved 4 December 2016. Forum poll says six out of 10 Canadians on side with Shoppers application to sell medicinal weed. 
  15. ^ Cain, Patrick (9 October 2016). "How will legal pot be sold? Three things that might happen, and one that won’t". Global News. Global News, a division of Corus Entertainment Inc. Retrieved 1 December 2016. I see some kind of government control at the level of distribution, but I’m not sure what that's going to look like. I find it hard to believe that they are going to allow dispensaries to simply cross over in their current form. 
  16. ^ Cullen, Catherine (30 November 2016). "8 burning questions about the coming federal pot report Who can buy and sell pot, where it will be sold, and who gets the profits, all up in the air". CBC News. CBC. Retrieved 30 November 2016. 
  17. ^ Benzie, Robert (3 December 2016). "Trudeau urges police to ‘enforce the law’ on marijuana". Toronto Star. Toronto. Retrieved 4 December 2016. A "frustrated" Prime Minister Justin Trudeau wants police to enforce the law and criminally charge illegal marijuana dispensaries. 
  18. ^ Brait, Ellen (10 March 2017). "‘Prince and Princess of Pot’ released on bail". Toronto Star. Toronto. Retrieved 13 March 2017. 
  19. ^ "Public Opinion and Illicit Drugs - Canadian Attitudes towards Decriminalizing the Use of Marijuana" (PDF). The Fraser Institute. April 2001. Retrieved 2015-10-23. 
  20. ^ "7 in 10 Canadians support marijuana legalization". CTV News. 30 June 2016. Retrieved 2016-10-11. 
  21. ^ "About Marijuana". CAMH. CAMH. 2012. Retrieved 2 December 2016. 
  22. ^ "Canadians Worry Roads Will Be Unsafe When Marijuana Legalized". BCAA. BCAA. 14 November 2016. Retrieved 2 December 2016. There are a lot of misconceptions out there that marijuana doesn’t affect your driving, or even worse, it makes you a better driver ... There needs to be significant resources devoted to educating the public in the run-up to – and after – marijuana is legalized. 
  23. ^ Cain, Patrick (October 12, 2016). "Canada will see 900,000 new pot smokers under legalization, poll implies". Global News. Global News, a division of Corus Entertainment Inc. Retrieved December 4, 2016. 
  24. ^ a b c Skerrit, Jen (30 November 2016). "Marijuana producer jumps 356% as Canada's investor pot frenzy intensifies". The Globe and Mail. Toronto. Retrieved 2 December 2016. 
  25. ^ a b Cullen, Catherine (1 November 2016). "Legal marijuana could raise federal cash — but not right away, PBO says". CBC News. CBC. Retrieved 4 December 2016. In the first three years, it expects the number of cannabis users aged 15 and over to grow by more than half a million, rising to an estimated 5.2 million in 2021. 
  26. ^ "Authorized Licensed Producers for Medical Purposes". Health Canada - Drugs and Health Products. Health Canada. 23 November 2016. Retrieved 2 December 2016. 
  27. ^ Miller, Jacquie (12 December 2016). "Number of Canadians buying legal medical marijuana triples in just one year". Ottawa Citizen. Ottawa. Retrieved 14 December 2016. As the use of cannabis becomes more mainstream, more doctors are prescribing it, says Linton. 
  28. ^ Koven, Peter (17 September 2016). "Tweed Marijuana renames itself Canopy Growth Corp as it charts growth path at AGM". Financial Post. Toronto. Retrieved 2 December 2016. 
  29. ^ "Canopy Growth and Mettrum Announce Respective Shareholder Approvals of the Plan of Arrangement". Mettrum. 27 January 2017. Retrieved 15 February 2017. 
  30. ^ MidasLetter (1 December 2016). "Canopy takes over Mettrum, here's who might be next in its sights". Financial Post. Toronto. Retrieved 2 December 2016. 
  31. ^ Freeman, Sunny (14 February 2017). "Canopy Growth Corp almost triples revenue as number of patients soars". Herald. Calgary. Retrieved 14 February 2017. FINANCIAL POST 02.14.2017 
  32. ^ "Canopy Growth Corp". Globe and Mail. The Globe and Mail. Retrieved 2 December 2016. Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a diversified cannabis company. 
  33. ^ Southwick, Reid (27 January 2017). "Investors dive into marijuana stocks, raising concerns about green bubble". Herald. Calgary. Retrieved 15 February 2017. 
  34. ^ Gibillini, Nicole (1 December 2016). "'Don’t do it': Marijuana stocks 'very risky' for investors, money manager says". Toronto: BNN/Bell Media. Retrieved 2 December 2016. 
  35. ^ Tencer, Daniel (1 December 2016). "Canada May Face Marijuana Shortage When It's Legalized: Canaccord". HuffPost Canada. Huffington Post. Retrieved 2 December 2016. Canada's system for licensing marijuana producers is so tough that there likely won’t be enough producers to meet demand when the federal Liberals legalize the herb 
  36. ^ Wagner, Brian (4 February 2016). "Becoming a Licensed Producer of Medical Marijuana in Canada". NHP Consulting. NHP Consulting. Retrieved 2 December 2016. There are many unknowns about how Canada will regulate marijuana on a recreational level, but we do know that it is indeed coming. 
  37. ^ "Canada should regulate recreational pot production: panel". Reuters, Health. Reuters. 13 December 2016. Retrieved 13 December 2016. The Canadian government should regulate the production of cannabis when it is legalized for recreational use while the provinces should be allowed to determine how it is sold, an official panel recommended on Tuesday. 
  38. ^ Israel, Solomon (28 March 2017). "Marijuana industry gets boost from legalization target date". CBC. CBC. Retrieved 28 March 2017. 
  39. ^ Cochrane, David (26 March 2017). "Liberals to announce marijuana will be legal by July 1, 2018". CBC. CBC. Retrieved 28 March 2017. 
  40. ^ "LCBO well suited to sell marijuana when legal, Kathleen Wynne says". CBC News. CBC. 14 December 2015. Retrieved 14 December 2016. Ontario premier says it makes sense to use distribution system province already has in place 
  41. ^ LeBlanc, Daniel (13 December 2017). "Federal task force advises wide-ranging legalization of recreational marijuana". The Globe and Mail. The Globe and Mail. Retrieved 13 December 2016. The group of experts, chaired by former Liberal minister Anne McLellan... 
  42. ^ Hager, Mike (13 December 2016). "Not yet clear where legal marijuana will be sold in Canada". The Globe and Mail. Toronto. Retrieved 14 December 2016. Liberal insiders say Ms. Wynne was only "musing" about liquor store sales last year and the government has no serious plans tor put pot in the province's 654 outlets. The union that represents LCBO employees is lobbying for the Crown corporation to sell marijuana. 
  43. ^ Cryderman, Kelley (27 November 2016). "Report on Canada's marijuana legalization due this week". The Globe and Mail. Toronto. Retrieved 2 December 2016. 
  44. ^ Duggan, Kyle (13 December 2016). "Set minimum legal age for marijuana at 18, says task force". iPolitics. iPolitics. Retrieved 15 December 2016. 
  45. ^ LeBlanc, Daniel (13 December 2017). "Federal task force advises wide-ranging legalization of recreational marijuana". The Globe and Mail. The Globe and Mail. Retrieved 13 December 2016. The group of experts, chaired by former Liberal minister Anne McLellan, is also recommending that high-potency products be more heavily taxed, to "discourage" their use in the general public. 
  46. ^ Cochrane, David (26 March 2017). "Liberals to announce marijuana will be legal by July 1, 2018". CBC. CBC. Retrieved 28 March 2017. 

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