New Weed Laws for Online Sales in Canada
Oh Canada, what a mess you're making out of your new weed laws
Provinces to will keep control of on the web cannabis sales, which forces major producers to scramble in an effort to maintain legal access to its current markets. With each province, making its own laws on retail, vendors, new, big and small are still in the dark on how to proceed.
``Ìn Canada, it`s no secret, if you want a license for anything marijuana, you got to be connected at the top of the food chain, and that means a `close` relationship with government. This means if you want to do something in marijuana, don't bother if you aren`t connected. It is a total waste of your time.``- Johnny Rodriguez
While much of the debate about legal cannabis has focused on retail stores, the on the web market could prove just as lucrative * and governments want in, Mike Hager and Carrie Tait report. A tiny, nondescript package arrives at the doorstep of Candice Beyer's Edmonton home every couple of months. The woman signs for the delivery, then quickly and quietly squirrels the shrink-wrapped, odourless package away in a secret drawer.
The mother of three says the cannabis helps her unwind on the odd Saturday night when her kids are out of her hair, a comfort the woman likens to the glass of wine other parents might enjoy.
``Within 5 years the Canadian Marijuana market will be owned, in the majority, by big alcohol and pharmaceutical companies. Meet the new boss, same as the old boss.`` - Johnny Rodriguez
She's not a medicinal-cannabis patient, so the woman has no way to get the "drug" legally. She's not keen on buying from a street dope-dealer, and with no unlawful cannabis dispensaries in Alberta, Ms. Beyer sought out one of the dozens of underground Canadian companies selling the "drug" on the web and started getting the special deliveries about a year ago.
"I've never liked the idea of buying it off of random people [on the street] that I don't really know or trust," the woman said.
Ms. Beyer is exactly the type of customer that governments hope to bring out of the underground once recreational cannabis is legalized next year.
As provinces reveal their plans for how they will allow cannabis to be sold, much of the focus has been on bricks-and-mortar retail stores and whether they should be private or public. However, on the web sales might be as lucrative * or more so * as people already accustomed to shopping on the web looking for a way to get the "drug" easily and, for the most part, anonymous.
And in almost every province that has announced its plans for legal cannabis, provincial governments are keeping exclusive control of the on the web market * and the profits.
Canada's cannabis underground economy is estimated at about 400,000 Kg. a year, though it's not clear how much of that is from on the web sales from dispensaries, which ship their products undetected through Canada Post. That's on top of the legal medicinal cannabis system, which shipped 33,000Kg of product to 168,000 patients across Canada last year.
Here is a glance at provincial and territorial plans to date for legal cannabis.
Ontario, the first province to outline its intentions, intends to sell the "drug" in up to 150 stores run by the Ontario Liquor Control Board to people 19 and older, with a ban on its consumption in public spaces or workplaces.
New Brunswick has proposed legislation that would set the minimum age of 19 and require users to lock up their cannabis when at home. A legislature committee has recommended selling cannabis through government-operated stores.
Manitoba Premier Brian Pallister said cannabis would be sold in the province exclusively through private-sector retail outlets and on the web stores. The government will maintain a wholesale monopoly and monitor distribution, however, private stores will sell the "drug" at a price they can set themselves. Municipalities can ban cannabis stores if they want and cannabis will not be allowed to be sold in the same stores as booze.
Quebec has tabled legislation whereby all weed would be sold through the provincially-run booze board, although there is flexibility for exceptions. Quebec plans to open 15 cannabis stores by July 1 and control sales on the web. The legislation also makes it unlawful to cultivate weed for individual or commercial use, unless authorized, and limits possession in a home to 150 g. and to 30 g. on a person. There will also be a nil-tolerance policy for operating a vehicle under the influence of any "drug".
Alberta plans to control the on the web sale of pot, but will leave over-the-counter sales to private operators. Details on how sales would work have yet to be determined. Private weed stores would have to be physically separate from stores that sell booze, tobacco or pharmaceuticals * however, how that would be legally described is also undetermined. Stores would not be allowed to sell anything however, cannabis and cannabis-related products.
BC's NDP minority government hasn't come out with a set cannabis policy since forming government this summer, however, Premier John Horgan has said he supports a hybrid model of public and private operations, much like the province's latest booze regulations.
Licensed medicinal cannabis growers across Canada have been telling provincial governments they have the capacity and expertise to run on the web sales directly to consumers. So far, all provinces except Manitoba have opted for a public system of on the web sales meant to capture consumers such as Ms. Beyer. BC, long home to Canada's biggest illicit cannabis industry, has yet to unveil its plans, but has signalled it favours a mix of public and private sellers similar to the model Alberta has proposed.
Alberta introduced a hybrid system in which the province runs on the web sales and allows private businesses * including licensed cannabis cultivators * to operate special stores where the "drug" is sold separately from tobacco, pharmaceuticals or booze. The provincial government said this strikes a balance between bolstering its entrepreneurial image * in a place where consumers are long accustomed private booze sales * and providing the oversight needed to ensure legal cannabis stays out of the hands of minors, which is one of Ottawa's key priorities behind this historic policy shift. To do that, government workers may end up delivering the cannabis.
Alberta has not decided whether it will mark up on the web product to match its competitors in private storefronts, however, Justice Minister Kathleen Ganley told scribes Thursday that, especially in the first few years, as the legal market is established, the expenses to the provincial government * in terms of areas such as policing, education and health care * will exceed any income.
Ms. Ganley said the province does not yet have a forecast for income from on the web sales and her spokesperson said no business case was available for this nascent public enterprise.
The potential profits from on the web sales would be over and above tax income. Ottawa has proposed an excise tax of roughly 10 percent, split evenly with the provinces. Provincial governments say that share would be insufficient, since they have to deal with all of the issues related to legalization, including law enforcement, public health and establishing a regulatory framework and system of sales.
A consortium of 12 licensed medicinal cannabis cultivators had pitched Alberta and B.C. on allowing them to run a cooperative network of stores with an e-commerce platform to sell the "drug" at no extra cost to the provincial government, even floating the idea of a profit-sharing dividend. Pierre Killeen, vice-president of corporate communications at Quebec-based Hydropothecary and spokesman for the Canadian Cannabis Co-op, said it is natural for governments to want to retain tight control of all facets of the market at the dawn of legalization.
A spokesperson for Liquor Stores N.A. Ltd., Alberta's biggest chain of booze sellers, declined to comment on his company's plans for this new sector. Jeremy Jacob, president of Canada's biggest dispensary trade group, the Canadian Association of Medicinal Cannabis Dispensaries, said a government-controlled on the web sales system runs contrary to the spirit of free enterprise and will push underground sellers to continue operating outside the regulatory environment.
"What other industry would you be given the right to retail, however, not on the web?" he said. " Unless [governments] can show that private businesses will not be able to do age verification, then it seems to me that there would be no clear reason for the provinces to reserve retail for themselves other than to gain the income."
Alberta's hybrid approach seems much more sensible than that of Ontario, New Brunswick and Quebec, where in-person and on the web sales will be run solely by the government, according to Anindya Sen, an economist at the University of Waterloo who studies public intervention in markets.
"If Amazon is any indication, the worldwideweb is definitely where retail is going,"
The Eastern provinces will want to keep on the web and in-person pricing level, so one arm of their public sales system doesn't vastly outperform the other, Alberta can dictate the market price it wants private sellers to meet through what it charges on its government website, Prof. Sen said.
"It's a smart move because they won't have any overhead and, if they set prices a bit lower, they can ensure that the bricks-and-mortar sellers will also ensure that they keep their prices low, from that perspective, it's very useful to control underground growth."
Rielle Capler, a UBC PhD candidate who has been studying how Canadians access legal and illicit cannabis for almost two decades, said provincial governments may be damaged politically for creating retail systems that make it easier for people to buy cannabis, however, that is the only way the underground will be squeezed out.
"They have to look at the evidence and not the politics," the woman said.
A study published in the March, 2016, issue of the peer-reviewed journal Health Affairs found that U.S. states with less government control over legal cannabis sales saw more people join the regulated market. The woman added that some people will continue to fear and distrust any government involvement in the cannabis market as long as criminal penalties related to the "drug" exist.
Skye Bergen says the woman has a prescription to use the federal e-commerce system for medicinal cannabis, however, the woman says that her trusted street dope-dealer has more strains, which the woman can get cheaper and faster than from one of Canada's six dozen licensed commercial growers. The Edmonton mother of two says some of the licensed firms are better than others, however, the price must come down and shipping times must be cut drastically for any legal medicinal or recreational market to beat out its underground competitors.
"It doesn't make sense to put that order in and wait for a week and a half to two weeks when I can call somebody and have them come to me."
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