Cannabis Act Review

When the Cannabis Act was passed into law, a formal review of this piece of legislation was baked into the framework.  According to subsection 151.1 (1) of the Cannabis Act, a review of the Act and its “administration and operation” is to be conducted three years after it comes into force.  October 17^th of this year marked the much anticipated third anniversary and with that, the review of this landmark law begins.  A report of the review is to be laid before each House of Parliament no later than 18 months from the onset.

In order to review the Cannabis Act and assess the merits of how it has been administered and operated, we must understand why this legislation was proposed and ultimately enacted.  The purpose of the Cannabis Act is outlined in subsection 7 and it states therein that the Act is designed for seven reasons:

To avoid overlap in analysis, GH360 has condensed those seven items into these five:

With these measurable identifiers of success in mind, let’s assess whether the administration and operation of the Cannabis Act has lived up to its own goals.

A major consideration of policymakers when it came to the legalization of cannabis was how to effectively keep it out of the hands of young people.

Age-gating the product at the point of sale has been an effective measure in the effort to keep youth consumption rates as low as possible.  Every province in Canada has set the minimum age to purchase or possess cannabis in accordance with the provincial drinking age except for Quebec and Manitoba, where consumers need to be older than the drinking age to purchase cannabis.

Kelly Beker, co-founder and director of The Cannabis Education Guild, believes that strict marketing regulations have played a key role in minimizing the appeal to young people in addition to the success of age-gating.

“The government’s regulations in the Cannabis Act were effective in minimizing harm and ensuring public safety,” says Beker. “It is illegal to have any advertising in front of minors, which has not allowed the companies creative reign, but has helped regulate access and restrict appealing to youth.”

Subsection 17 (1) of the Cannabis Act speaks to the promotional regulations of cannabis and states that it is prohibited to promote cannabis in a manner that evokes any negative or positive emotion about the product.

These restrictions have contributed to the average age of initiation increasing and youth consumption rates maintaining stability over the course of legalization.  When the Cannabis Act came into rule, Health Canada established and executed the Canadian Cannabis Survey (CCS), to gather in-depth data regarding the behaviours and tendencies of people in relation to their cannabis use.  According to results from the 2020 edition, the CCS found that the average age of initiation is actually up to 20.0 years old from 19.2 in 2019.

A comparison of the results from the 2017 CCS to the 2020 CCS reveals that cannabis use over the last twelve months is up across all age groups.  However, the rate of increase in the last two years is slowest among the youngest age group surveyed, suggesting a success in the protection of youth from cannabis.

One of the major goals of legalization is to end the unregulated sale of illicit cannabis.  The legacy market has had a monopoly on the entire cannabis industry for almost a century.  To expect this massive criminal enterprise to disappear overnight with the passing of a law would be naïve.

Cannabis was criminalized in 1923 when it was tacked on to the end of the Act to Prohibit the Improper Use of Opium and other Drugs.  In the near hundred years of prohibition, the legacy market has evolved from shady face-to-face interactions to snazzy online shops that send customers emails promoting weekly bargains.

Canada is the second nation on earth to legalize cannabis for recreational use on a federal level, following Uruguay’s lead. There are also a few states in USA that legalized before Canada but clearly the established precedents for the Canadian legal cannabis market to draw from were limited.

Progress towards eliminating the legacy market has been made but several metrics indicate that the legacy market still has a majority of the market-share in cannabis sales.  Additionally, a survey of Canadian budtenders that was conducted for this article found that the majority of budtenders surveyed believe the legacy market is winning the price-battle against the legal market.  When the majority of people on the front lines of selling legal cannabis are of the opinion that illicit cannabis is cheaper, there is undoubtedly a price-problem.

Data from Statistics Canada corroborates the opinions of the surveyed budtenders and points to a widening gap in price between the legal and legacy markets.  In the fourth quarter of 2019, the average price of legal cannabis was $10.30 per gram, while the legacy market was selling cannabis at an average of $5.73 per gram.

The CCS asked Canadians which factors most influenced who they obtain their cannabis from.  Price was the factor with the highest percentage of first priority votes, with safe supply and quality coming second and third.  If the legal market is to catch up, their prices need to go down.

In theory, the legalization of cannabis is a fantastic concept.  Cannabis sales are subject to taxes that provide governments with more capital to invest in social programs.  The legacy market loses its 100 per cent market share of cannabis sales and is forced to compete with flashy retail stores in heavy-traffic locations.  Best of all, simple possession of small amounts of cannabis is no longer a federal crime for people 18 and over.  Criminalizing inconsequential possession has long defied the ethos of a plant with medicinal and therapeutic properties.

According to data from Statistics Canada, police recorded 26,861 cases of illegal cannabis possession in Canada in 2018.  The following year, the first full year of legal recreational cannabis in Canada, the number of recorded cannabis possession offences dropped to 1856.

The impact of legalization on new cannabis related offences has been tremendous and is lessening the burden on the criminal justice system.  However, the effects of previous repressive cannabis laws remain for those convicted of cannabis-related offences prior to the Cannabis Act.

Estimates of Canadians with cannabis-related criminal records range from 250000–450000.  While the government did enact Bill C-93 in June 21 of 2019 to give eligible Canadians free pardons for old cannabis offences, few applications of this nature have been processed and critics believe more sweeping reparations should be paid.

“They should expunge records for cannabis possession en masse,” says cannabis retail store manager, Michael Deng.  “Making people go through extra hoops to reintegrate into society for a weed possession offence really isn’t fair when any adult with ID can come to my store and pick up.”

The government’s hesitancy to issue a blanket expungement for petty cannabis-related offences prior to legalization is evidence that a stigma towards cannabis still exists.

“What makes someone possessing 5 grams in 2016 a criminal but someone carrying 25 grams in 2021 not? It doesn’t make sense,” says Deng.  “At my store we serve people from all walks of life, cannabis is used by every type of person you can imagine.”

In order for the legal recreational cannabis system to work effectively from launch, the average adult consumer would need easy, familiar access to cannabis in the same way that the average consumer picks up a bottle of wine on the way home to enjoy with dinner.

However, the access to cannabis from legal retail outlets was frustratingly underwhelming during the initial stages of legalization.  In Ontario, there was not a single retail location to purchase legal cannabis from until April 1^st of 2019, almost six months into legalization.  Until then, the only access consumers had to legal cannabis was through the government’s online store.

Ontario’s slow cannabis retail rollout can be attributed to the now-scrapped Cannabis Retail Lottery.  The first round of the retail lottery awarded 25 licenses to retailers and another 42 licenses were awarded in a second lottery round, before the government abandoned the lottery in favour of an open market in January of 2020.

The decision to scrap the lottery and issue licenses to retailers that fulfill extensive application requirements has drastically improved the access to cannabis at retail locations and has created a marketplace in Ontario that many consider oversaturated.

“I get lots of comments from my regulars about how the streets have become inundated with dispensaries,” says cannabis retail store manager Michael Deng.  “I can see new stores popping up every week on my commute to work.”

On September 1^st 2020, Ontario had 150 retail locations open for business and announced they were increasing the rate of Retail Store Authorizations from 20 to 40 per month.

By December that rate had increased to 80 new retail stores per month and further increased to 120 per month in February of this year.  At the time of writing, Ontario has authorized 1254 cannabis retail stores to open and 296 of those are in Toronto.

Julia Pynn lives in Toronto and has worked in cannabis retail locations across Ontario.  Her neighborhood has seen a startling rise in the amount of cannabis retailers and could potentially be the most oversaturated in the city.

“I worked at the grand opening of the first legal dispensary in Sudbury, four hours north of Toronto,” says Pynn.  “I remember so many customers coming in and saying they drove over two hours to make their first legal weed purchase and I thought it was crazy there weren’t more stores.  Seems like all the stores are in my backyard on Queen Street.”

The three kilometre strip of Queen St W between Dufferin St and Spadina Ave features 19 cannabis retail locations with three more on the way.  For perspective, the walk from Guelph-Humber to Albion Centre takes the same amount of time and has two cannabis retail stores en route.

Click the maps to compare

Maps Courtesy of AGCO

“Queen Street used to be known for trendy restaurants and bars, that was a big reason I chose to move down here,” says Pynn.  “All of that has quickly disappeared and been replaced by a ton of weed stores.”

The aforementioned strip of Queen St W features two sets of neighbouring cannabis retailers, or at least it used to.  During production of this article, one set of those neighbouring cannabis retailers had a shop go out of business.

Click photos to compare Queen St W then and now

Two restaurants have become neighbouring cannabis retailers.

Click photos to compare Queen St W then and now

An ice cream shop and vintage clothing shop have become neighbouring cannabis retailers.  One of the new cannabis shops is already out of business.

Access to cannabis retailers is no longer an issue, especially in most urban areas. But being able to visit dispensaries does not necessarily equate to having access to cannabis if the products that those dispensaries carry is priced at a point that the consumer cannot pay.

The majority of surveyed budtenders working in the legal industry believe that the illicit market is cheaper than the products they sell.  However, data from the same survey suggests budtenders believe the products they sell are safer than those on the illicit market.

The legalization of cannabis creates an industry with operation standards.  Cannabis becomes a highly regulated and quality controlled product, ensuring consumers are not exposed to toxins, mold, bacteria, banned pesticides and other additives that are unfit for human consumption.  Deng says the quality controlled nature of legal cannabis is something the black-market cannot compete with.

“You have no idea what the practices of a black-market grower are,” says Deng.  “There are dangerous additives they use and many corners they cut to speed up their harvests, or to make their buds more aesthetically pleasing to the consumer.  Having been to many of the facilities that grow the products I carry on my store’s shelves, I can attest to the high-end conditions.  The black-market can compete with us on price but they will never compete with the legal market on quality-control and safe grow conditions.”

Medical cannabis has been legal in Canada for almost twenty years but like most medicine, there are risks associated with use. 75 per cent of respondents to the CCS know or believe cannabis smoke can be harmful and 84 per cent of respondents believe teenagers are at greater risk of harm from using cannabis than adults.  Both of those figures are encouraging and show that the majority of Canadians understand there is risk involved in the consumption of cannabis.

However, the extent to which Canadians understand those health risks is underwhelming. The 2020 CCS found 27 per cent of respondents reported having used cannabis in the past 12 months. Data from the same survey reveals that a paltry ten per cent of Canadians were aware of the Lower-Risk Cannabis Use Guidelines (LRCUG).

In May of 2019, the Public Health Agency of Canada published the informative LRCUG document outlining recommended guidelines for lower-risk cannabis use.   The document was designed to be digestible, evidence-based and directed towards the little over 1 in 4 Canadians who consume cannabis.  The development of these guidelines was funded by the Canadian Institute of Health Research and is endorsed by a number of top Canadian medical associations.

An initiative subsidized by taxpayers intending to provide a quarter of the population with valuable tools to mitigate the risk of a newly legalized psychoactive substance, that in reality only ten per cent of Canadians are even aware of, is a failure in regards to public awareness of health risks.

Toronto budtender and Guelph-Humber graduate Shane D’Costa has worked in the legal cannabis industry since its inception and believes the average cannabis consumer is ill-informed.

“The average customer has no idea what product they’re looking for and oftentimes they ask us to guide them through their purchase,” says D’Costa.  “There are heavy restrictions surrounding what we as budtenders can say to consumers about the effects that products may elicit.  We’re kind of forced to stick to marketing buzzwords like ‘calming’ or ‘centered,’ and that does little to teach consumers about the product to inform their next purchase.”

A cannabis retail shelf

The ultra-tight restrictions surrounding cannabis marketing language have created an environment where products struggle to differentiate themselves on the shelves from one another.  Cannabis brands are limited to vague language to express to consumers the effects of their products, as are the budtenders ultimately selling the product.  This foggy language clouds the judgement and understanding of consumers.Like D’Costa, Beker also has years of experience on the front lines of the cannabis industry.  In the period leading up to legalization, Beker was working as the manager of special events at Aurora Cannabis.   She also shares D’Costa’s impression of cannabis consumer knowledge.

“Cannabis is regulated more closely to the Tobacco Act than to alcohol and that restrictive language stifles knowledge. The average consumer is overwhelmed by marketing buzzwords,” says Beker.

Beker believes that formally educating the public on cannabis as a product and industry is the best way forward to ensure the gaps in knowledge left by the unread LRCUG and restrictive marketing language are filled. She also has recommendations to offer the government as they initiate their review and compile their report the cannabis industry.

“There should be a more integrated approach to education,” says Beker.  “Students should learn about cannabis in school. Not only as a harmful drug, but for medical and industrial purposes; otherwise it will not be socially accepted as a medicine and essential crop for a more sustainable future.”