A Look Into Legal Cannabis: Canada vs. Massachusetts
Both Canada and Massachusetts have been in the news for allowing adult-use cannabis consumption. Back in October of last year Canada became the largest country to legalize cannabis and create large-scale government-run stores, in addition to private shops. Once Prime Minister Justin Trudeau allowed for legalization, over 100 cannabis stores popped up, seemingly overnight. These stores were a mix of publicly run and privately-owned retailers. In MA, private companies went through a more lengthy and expensive application process.
Products popular in MA are banned in Canada; items such as vape cartridges and edibles are forbidden during the first year of sales. In addition, Canada has a different age cutoff, public health controls, social justice issues and a different approach on the role of big corporations. Prices for cannabis are high and the products are few and in short supply. Canada and Massachusetts both have a booming black market currently, as consumers still find it easier and cheaper to do business illicitly instead of purchasing from actual dispensaries, no matter what sector. In Canada, the government-ran stores are professional, clean, and well organized. They also ensure that children passing the store cannot see cannabis inside. In Quebec the sale of posters, and t-shirts bearing pot leaves and anything bearing 420 or pro-pot messaging is banned, to keep from encouraging youth interest. The minimum age in Canada to purchase cannabis is 19. However, in Quebec the current age limit will change in the fall from 18 to 21. Legalization also made it easier for people with previous cannabis convictions to be eligible for expungement. Canada made no effort to create business opportunities for people in the communities that saw high prosecution rates during prohibition. In the realm of social justices these were major sticking points for legalization in states such as MA and others following suit.
One area Massachusetts may end up copying is the implementation of government-ran stores. Government stores proved to be effective, according to public health advocates, in the sense of removing profit motive that was seen with alcohol, tobacco, and opioids. This insatiable profit motive has led to companies lobbying for looser rules, obscuring health risks, and pushing increasingly addictive substances on the youth.
By contrast, in Massachusetts when you arrive at the airport you are greeted by a sign that says “Smile, weed is legal”. A letter written in May on behalf of 40 local doctors and scientists implored the state to adopt regulations that prioritize public health efforts like Canada. The government there has control of sales, precise warning labels about mental health risks, and stricter bans on advertising and medical claims as well as oversight by health authority. As of right now, the labels on marijuana prescriptions read “There may be associated health risks” and warnings about driving or while pregnant or while breast feeding. Dr. Sharon Levy the director of substance abuse in MA stated “Businesses are supposed to sell more of their product but that’s really dangerous with addictive substances”. Canada has worked to counter-balance that profit motive. The American Journal of Public Health shows that government ran stores were linked to lower rates of alcohol consumption and youth access. While cannabis is safer, with heavy smokers and higher potency product, there is a risk for psychosis.
On the business front, they have access to financing from the stock market and banks. Canada’s private companies have become huge, dominating the market and benefitting from economies on scale. This differs from the US model where federal prohibition on cannabis means each states’ system is independent and financial institutions are cautious about joining forces. Canada’s 5 largest companies are Canopy, Aurora, Hexo, Aphiria and Organigram also control about 73% of the market. Prime Minister Justin Trudeau made legalization a part of his campaign promise back in 2015. Provinces were still able to ban people from growing at home but federal law allowed up to four plants per household. After 9 months of business the effort was self-declared a success- as already part of the black market has been disrupted and projected larger numbers in 5 years’ time. There was also no evidence of a rise in youth consumption, drug impaired driving and no problems at the border. Additionally, Canada taxes medical cannabis at a rate of 10 to 15% in part because of officials fearing that recreational user would come over to the medical side to avoid taxes. Patients complain that its unfair as they need this medicine and already pay fees to be in the program.
Canada’s business model shuts out the “little” guy—private unlicensed companies hope to be bought out by the big guys as they can’t afford all the fees involved in becoming licensed such as the hefty $10 million application fee process and retrofitting a building. About 80 percent of sales are still done through the black market. In the last quarter of 2018 about 5.9 billion was made from cannabis sales. However, only 1.2 billion was through legal channels according to Statistics Canada. As of right now prices for legal cannabis, and cannabis products, are about 33% higher than those on the black market.