Canada’s cannabis legislation almost 12 months on

Canada’s cannabis legislation almost 12 months on
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Canada’s cannabis legislation almost 12 months on

Canada legalized recreational cannabis almost a year ago. Prime Minister Justin Trudeau said would wipe out the cannabis black market while allowing pot smoking under controlled conditions. Amid calls of “fake legislation”, we take a look at how legal pot smoking is working. There are mixed results with concerns about the quality and price of legal weed, and shortages of legal cannabis for sale. The black market is still thriving and old institutions close.

Black market still thriving

Cannabis is legal for recreational use in Canada for adults aged 18 and over in Quebec and Alberta, and 19 anywhere else. But 6 months after legalization the black market is still thriving with 79 percent of sales. So legal pot is not outselling the black market yet. January’s government figures showed around $5 billion worth of sales were on the black market compared to $2 billion in legal sales. Part of the reason for this is price. According to an anonymous survey by Statistics Canada, legal cannabis costs an average of 40 percent more than on the street for 3.5 grams. The average cost from legal sources can be as high as $10.91 a gram when buying an eighth of an ounce which is the most popular amount bought through legal avenues. But the biggest is issue supply does not meet demand in parts of Canada. While growers have licences to grow a million kilograms a year, the issue is the supply chain. Many underestimated the distribution and packaging challenges which has left many retailers short in supply and closing their doors on a regular basis. Atlanta’s Small Town Buds co-owner, Chris Felgate, said they closed their doors at least weekly once they ran out of bud up until April. Demand far outweighed supply and even though they still had capsules and oil in stock, people wanted bud. This has improved to where the store is consistently open. Felgate said they had to buy what was available “whether they liked the product or not”.

Legal weed unimpressive

While Canadians celebrated legalizing recreational weed, government pot shop products disappoint. You cannot smell or checkout the product before you buy. This is driving Canadians wanting to do the right thing straight back to their street dealers. With the issues of supply, legal suppliers turn customers away. High North marijuana store operator, Trevor Tobin said people will look elsewhere if he cannot supply what they want. He said running a legal cannabis business with his mother was difficult and they lost money every day they could not supply product. They also have to compete with unlicensed stores that sold hash and edibles legal stores could not yet sell.

Complaints about legal weed

There have also been complaints that legal products are not as good as black market products. A WeedMaps user reviewed Toronto’s first legal pot shop, the Hunny Pot saying it as an absolute rip off and to go to CAFE instead. I went to this dispensary tonight and I was very disappointed with the whole process and the quality of bud I ended up with. Probably the worst experience I’ve had so far. 20 minute wait outside in the cold to wait again inside for another 20 minutes then be shown the options by another staff which took even longer. The weed I ended up with doesn’t even look or smell like the product they had on display. The product I got smelt like barn hay and was just as dry. It also sparked when I smoked it which means it was grown with chemicals. The only reason I’ll go back is to get a refund for this purchase. Go to Cafe instead. They offer a free gram after you buy 6 and the offer a medical discount as well. They are the best in this city Here’s an update. I did go back for a refund and was denied one. They say they are a legal store like the LCBO but they are just ripping off the customer by not standing behind their product by not offering an exchange or refund. I’m a medical patient and I can’t be smoking the garbage they offer. Others agreed saying the pot purchased was dry and they felt ripped off. Even people working in legal pot stores were buying from the black market. It costs less and is better quality. CD Howe Institute policy analyst Rosalie Wynoch said there will be a black market while there are price differences. People will always look for a better deal.

Ontario post shops

Health Canada said there are now 175 legal sites across the country to purchase or produce pot products. But Ontario, the largest province, has only issued 25 licences. And these were due to open on April 1. While some of these stores have not opened, a further 50 legal pot shops are due to open in October. But it is not easy. Ontario chose the original retailers through a lottery while pot was only available through online sales in the Ontario Cannabis Store which is run by the government. A lottery, run by the Alcohol and Gaming Commission, will again be the way of choosing the next 42 physical stores on August 20. A further eight pot shops will open on First Nations land using a different process. Winners of this lottery have to demonstrate they already have a retail space to operate from. They also need to demonstrate they have the capital to open. They need a bank letter that confirms they have access to $250,000 and another confirming letter they can access a further $50,000.

Pot prices higher than street prices

Since legal pot hit the streets, pot prices are nearly double the black market prices in some provinces. According to Statistics Canada, the average price of legal pot is $9.99 a gram while you can buy it for $6.40 on the street. This could be why Canadians still look to the black market for cannabis. Legal cannabis has an excise tax split between the government and provinces, and a sales tax at point of sale, pushing pot prices well above street prices. Pot prices by province are:
  • The most expensive weed is in the Northwest Territories at $14.15 a gram.
  • The cost of weed increased by a third in New Brunswick to $8.27.
  • The cheapest price is in Quebec at $6.75.
  • It rose 28 percent in Manitoba to $9.14.
  • Ontario is charging $8.05 a gram.
  • Alberta’s average pot price is $9.07.
  • British Columbia had the smallest price rise of 3.7% to $7.15.
  • Nova Scotia had a 19.7 percent price hike to $8.73.
  • Saskatchewan prices rose 10.3 percent to $8.02.
  • Prince Edward Island had a small price rise to $7.69.
And some legal weed customers not only complain about the high prices. Poor quality and lack of product selection is driving them back to black market dealers. A Statistics Canada spokesperson said 70 percent of cannabis used is bought on the street while only 30 percent came from legal sources. A BDS Analytics report forecasts Canadian spending on legal cannabis will rise from $569 million in 2018 to $5.2 billion in 2024.

Nunavut drops pot prices

With a serious drop in sales from the first to second quarter after pot legalization, the Nunavut government dropped its retail mark up from $4 to $1 a gram. The price in the area was higher than most other areas in Canada with pot costing an average of $14 to $16 a gram compared to the national average of around $10. The Nunavut Liquor and Cannabis Commission controls the distribution and sale of cannabis in the province. Recently the finance minister, George Hickes made a public service announcement reducing the government pot tax. He also said it had now expanded its product range. While reminding people its agents were the only ones who could legally send cannabis through the mail and cannabis edible products were not yet legal.

20-year institution closes its doors

The Vancouver Island Compassion Society (VICS) closed after serving the community for 20 years. A non profit organization, it connected people who needed medical cannabis with suppliers and passed on their knowledge. The 3000 strong organization was caring and offered its members a compassionate environment. Most of the members were in their 50s ranging up to those in their 80s. All had chronic illnesses and sought cannabis to combat conditions such as irritable bowel syndrome, pain and anxiety. The use of cannabis helped many reduce their use of opioids and, in some cases, eliminate their use altogether. But the legalization of cannabis put pressure on compassion clubs to close down with them facing possible government seizure of property and heavy fines. While this has not been the case so far, the fear of this happening pushed members to vote to close the doors. There is still a chance the club will apply for a retail licence down the track. The problem members now face is that legal pot shops do not offer the same services as VICS. Robin Krause worked at VICS for 17 years and said many of their members did not feel comfortable visiting legal pot stores. They say the cannabis offered is not good quality and overpriced, and did not offer a community health service.

Illegal Toronto dispensary refuses to close its doors

Illegal Toronto dispensary CAFE chain had 4000-pound concrete blocks placed in front of their stores to shut them down. Toronto bylaw enforcement official closed down CAFE’s four locations under the Cannabis Control Act until charges go through the courts. So, this closes them indefinitely as it could take years. But, true to form, CAFE removed the concrete blocks to open its doors at one of its stores. CAFE opened its first dispensary in 2016 and it quickly grew to four locations. Plagued with arrests, raids, federal and provincial charges, it remains open. A man had to be rescued from one of the stores after finding himself trapped inside. City officials deny they trapped anyone inside as they cleared the building before blocking it off. They say the man entered the building after the concrete blocks were put in place. By the next night the owners used heavy machinery to remove the concrete blocks at one location to reopen for business. Customers frequenting CAFE locations risk fines of up to $100,000 and a year in jail if they enter a store closed down under provincial law. A spokesperson for the City of Toronto said they considered moving the concrete blocks theft and police were investigating. At another CAFE location people were sitting comfortably outside the store with the concrete blocks still in place. Despite this, there were lights blazing inside the location. CTV News reported there were black SUVs ferrying people from the still closed CAFE locations to the one that was open. But the saga is not yet over for CAFE and its proprietors Wesley Webber and John Galvano who face 70 charges. The City of Toronto Licensing and Standards head of investigations, Mark Sarga says he has not given up. No one knows what this means for dispensary customers. But so far none of their customers face federal or provincial charges.

Pressure stepped up

In the ongoing CAFE saga, the man trapped by the concrete blocks is suing them for unlawful eviction from his home. Jeffrey Brodie who claims to be a tenant in the building said it was wrong for a tenant minding their own business to have their possessions seized and forcefully evicted without due process. After the concrete closure of the illegal pot stores, everyone thought that was the end of CAFE. But only two days later CAFE opened and began selling its weed to people outside. Police arrested and charged 18 people including a 16-year-old for selling pot out the front of two CAFE locations. The Toronto Police Department have now arrested and charged a 37-year-old male for possessing 1 gram of weed. TPS Media Relations Officer Allyson Douglas-Cook said their focus was on discouraging illegal pot sales. TPS has apparently had a lot of complaints from the community about the large volume of illegal activity at the dispensaries.

Second phase of legal cannabis

The second phase of cannabis legalization is due this year. A limited range of edibles will hit the market in mid-December. But these products cannot appeal to kids. Strict regulations around labelling and packaging aim to reduce the overconsumption and the risk of food contamination. Packaging must also be childproof and not appeal to young people. Border Security and Organized Crime Reduction Minister, Bill Blair, warned that buying these products on the black market was risky. He said they could contain dangerous fertilizers, insecticides and pesticides. Legal products will replace these with safer ones. Health Canada said they will assess any new product for smell, colour, flavour, shape and package to assess whether they will be attractive to children. And these are similar laws applied to vaping and tobacco products. There will be a limited supply when they first become legal with the available range expected to grow gradually. From last month, regulated cannabis producers can apply to Health Canada to sell their products. Once accepted after October 17, it takes 60 days for them to become available to consumers. Edibles will only have a maximum of 10 mg of THC to limit overconsumption and accidental consumption. The new range of legal products will include”
  • cannabis topicals which include makeup, ointments and oils
  • edibles which include baked goods and sweets
  • cannabis extracts.
Alcohol infused beverages and products that also contain nicotine, tobacco or caffeine will remain illegal.        

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