Legalisation in Canada blog Cannmart


A number of countries have decriminalized or legalized cannabis in certain states. However, Canada is the second country to legalize the sale of cannabis across all provinces and the first to do so with a developed economy.

Since legalization to this extent is a first, there have been some hiccups and problems that provinces are stilling working through.

Here is a roundup of the 5 things we’ve learned so far from legalization in Canada.

#1 It’s Hard to Predict and Be Prepared for Demand

You’ve probably seen headlines in the news about cannabis shortages following legalization. Provinces have been accommodating for these shortages in a number of ways.

For example:

• Quebec’s government-controlled retailer Société Québécoise du Cannabis (SQDC) shortened their opening hours to four days a week.
• Cannabis NB, New Brunswick’s only legal retailer, closed half of its stores in early November.
• In Alberta, private retail licenses stopped being issued until there’s more supply. Licensed producers couldn't deliver as many products as were ordered.
• In Ontario, the only legal store—the online Ontario Cannabis Store (OCS)—received over 1,000 complaints about delays, billing and customer service. Almost a month after legalisation, delivery times went back to normal.

The solution to these shortages is still in the future. Health Canada said they expect periods of low supply in the coming months. Some experts predict that this may last for a couple of years. However, the department says there is enough product to meet the demand overall. A report by the C.D. Howe Institute estimated that the legal supply would only meet about 30% to 60% of the demand following the first months of legalisation.

There are two main reasons those shortages may occur:

• Regulations are restricting cannabis growth — One reason for the shortages may be the strict regulations surrounding growing cannabis and the lengthy approval times for licensed producers (LPs). Months ago, Health Canada increased the approved production capacity from 185,000 sq. ft. to 1.2 million sq. ft. The department also said it's currently improving licensing.

• It’s hard to estimate demand — To estimate the demand for cannabis after legalisation, the government looked at the results of the National Cannabis Survey (NCS). The survey asked about Canadian’s cannabis use and spending. The problem is that when admitting (then illegal) drug use to the government, the results are likely to be skewed, affecting the estimation. Also, since Canada is paving the way, the government didn’t have any major economy to model. This made it difficult to estimate how big the demand would be and for which products.

#2 Some Medical Patients are Affected by Cannabis Legalization in Canada

Since some LPs took more orders than they could fill, there was also a shortage in the medical market and some people who need their medicine went without. However, some companies say the reason for the shortage is not because of recreational demand, but because of heightened medical demand. There are also no regulations that require LPs to fill prescriptions before recreational orders.

Another concern is that some patients are finding similar products sold recreationally at a cheaper price than they can get it medically. Since provincial dispensaries, such as the SQDC, can order in bulk, they can often sell cannabis at a cheaper price to the recreational consumer. But when patients buy straight from their LP, they don’t get those savings. While recreational users can switch between products as they’re available, a medical user needs their treatment to be consistent, so they can’t just choose whichever product is available and cheap.

Health Canada doesn't control the prices for medical cannabis, so there’s no clear solution yet. Some experts are calling for Health Canada to improve medical regulations while some LPs have said they’ve taken steps to broaden accessibility.

#3 Users Need More Accessibility

In some provinces, legal recreational cannabis is still not largely accessible. In Ontario, the only way to buy non-medical cannabis is through the online OCS. This requires every legal Ontario user to have access to the internet and a credit card. In April 2019, private storefronts will be allowed in the province but accessibility may still be an issue. Since private retailers across the country (except in Saskatchewan) must still purchase from a provincial government distributor, they will also be subject to any possible shortages.

Some retail stores in other provinces have temporarily closed because of shortages, making it difficult to purchase legal recreational cannabis there too.

Accessibility issues mean that, during shortages, the only way for a user to get their cannabis may be to purchase it illegally or get a medical prescription.

#4 Some Laws and Legislation Surrounding Cannabis are Still Unclear

Recreational cannabis is legal in Canada, but laws surrounding its use and sale are still developing. For example, the rules are still unclear involving:

• Impaired driving— How will police officers test drivers they suspect are under the influence of cannabis?
• Charges laid surrounding illegal storefronts— Will they hold up in court or will they be thrown out as many were prior to legalization?
• Entering the U.S.— Although the U.S. reversed their decision to ban cannabis workers, it still bars cannabis users. To what extent will this be enforced?
• Private Cannabis Retail— In provinces such as Ontario, municipalities will need to decide whether they will allow private retail stores. If cities opt out, accessibility of legal products could still be an issue.