A little over a year ago Canada became the second country, globally, to legalize cannabis for recreational use. Being involved in the retail side of the industry - I've been blessed with the opportunity to have an in-depth idea on what consumers expected, what became of legalization and what they want.

In Canada, cannabis has had a long standing relationship with civil disobedience and education. It was through these efforts and a shift in public opinion that led to the policy changes that we have today. 

The Federal Task Force on Cannabis Legalization and Regulation was struck in mid-2016 by the Prime Minister with a mandate founded on two principles – public health and public safety. Public health mainly came with the contexts of "keeping our children safe" and the public safety aspect was eliminating cannabis profits from organized crime.

What Was Expected

Depending on whom you ask the answers may defer:

  • From the public safety aspect, legalization was seen as a way to deter criminal activity and put a dent in organized crime.
  • From a consumer perspective many expected a wide range of clean, tested products with competitive pricing.
  • From a social perspective many anticipated a lessening of rules governing cannabis, a reduction in arrest and court costs. But most importantly, provide an avenue for those who have been affected by cannabis laws to partake in the industry.

What Became of It

Roll Out Chaos

It turns out that the cannabis market that has proven to be costly. Not just in Alberta but also in Ontario.

The criminals lied to us

- Ontario Finance Minister Vic Fedeli

In the words of Ontario Finance Minister Vic Fedeli "the criminals lied to us". It was this out of touch sentiment that has led to a lot of the retail chaos and cannabis chaos across the country. The government planned and acted on information that was never deemed to be accurate nor did they try and work with those operating in the industry an opportunity in the discussion. 

Regardless of the policy roll out chaos of year 1. The legalized cannabis industry has generated $1.1B toward the Canadian economy and is destined for future growth.

Consumption Skews Older

grayscale photo of man using magnifying glass

More people are trying cannabis following legalization and that's a good thing. But who's trying cannabis and visiting retail stores for the first time is not your stereotypical "stoner". Since legalization, those trying cannabis for the first time are more likely to be older (e.g., 45 years of age and up) compared to those trying for the first time before legalization.

Government Officials Can't Make Up Their Mind

Virtually all provinces have significantly reduced initial revenue forecasts.

Health Canada

When the year began, Health Canada had more than 800 cultivation, processing, and sales applications on its desk for review. On average, these reviews were taking many months if not longer than a year to complete, which ultimately has the industry moving at snails pace. 

To this date there have only been 8 micro-cultivation licenses granted in Canada.

Compliance Issues

The story of CannTrust took the industry by storm and proved that the newly regulated industry is not immune to corner cutting and shady dealing. Hexo's voluntary report to Health Canada about unlicensed growing with Newsstrike is another example.

The Legacy Market

Either old habits die hard or consumers weren't too fast to ditch their old suppliers. Many in Toronto saw a game of cat and mouse between old business models operating alongside a new regulated industry. 

What We Want

clear glass jar filled with kush

Change and growth

The Task Force did not address nor forecast short or long term economic impact of the industry nor did they take any economic considerations into account. I believe the Task Force operated without the benefit of a breadth of academic research on much of the subject matter as in Canada cannabis was an illegal substance and the country lacked a breadth of clinical information on the substance.

Similarly, even as the elimination of the illegal market was part of the justification for legalization, the Task Force did not study this issue nor did they make any recommendations to curtail growth.  

Canada has a record of disproportionate and unfair prosecution and charges toward certain populations. The original mandate of the Task Force did not address the issue of full amnesty; however the government did implement a pardon regime for Canadians with simple possession convictions with Bill C-93 in early 2019.

Advocacy work, from many of the countries best, for expungement continues as the pardon regime may be inadequate for many Canadians who want to travel, sit on corporate boards as directors or volunteer with children’s organization. 

Indigenous' Role in the Cannabis Act

Indigenous communities have expressed concerns about the adequacy of consultation and cultural considerations during the development of the Cannabis Act. Several Indigenous communities are establishing independent regulatory approaches for cannabis production, processing and sales on Indigenous land this also includes licensing and testing facilities.

Back in June 2019, the Chiefs of Ontario passed a resolution asserting complete jurisdiction over cannabis operations.

Research and Development

Research and Development in the Cannabis sector is in its infancy. Given the complicated nature of Intellectual Property rights in the sector there is natural tension between public and private funding models for research and product development. 

Some listed and discussed barriers for cannabis R&D include:

  1. Integrations with other industry players like food and beverage companies
  2. Intellectual Property issues  across borders for products and processes  
  3. Clinical trial delays and export of trials to other jurisdictions 
  4. Crop changes and integration into agriculture /large scale outdoor growing 
  5. Manufacturing process changes subject to new regulatory review
  6. Clarity around integration amongst educators, researchers

Legalization is here to stay in Canada and even with the mishaps, legalization can be seen as a symbol of our progressive mind. We'll see how the industry progresses into 2020.