Chairman's Desk

Canada’s Patchwork Of Pot

As the Trudeau government’s July 2018 deadline for the legalization of marijuana looms, Canadians are beginning to focus on the social and economic implications of the change. As political strategist and policy advisor Jaime Watt writes, both the federal government and its provincial counterparts have work to do to allay some serious concerns before next Canada Day.

Bill C-45, Canada’s cannabis legislation, was tabled in the House of Commons last April, signalling Prime Minister Trudeau’s commitment to proceeding with legalization. While the bill establishes a strict framework for production, sale and possession, major issues such as distribution, enforcement and road safety have been left for provincial and territorial lawmakers.

Provincial governments have expressed concerns about the July 2018 deadline that was assigned to them, but would be wrong to delay meaningful consultation, planning and preparation. Canada’s patchwork of competing regional, demographic, and cultural factors will greatly impact the entrance of legal recreational cannabis into the market.

The industry’s success or failure will be based on the ability of local decision-makers to work with producers and users to present a safe, legitimate, and fairly-regulated product.

Polling indicates that Canadian provinces will face challenges in this respect. According to Cannabis in Canada, Navigator’s monthly online public opinion tracking survey of 1,200 participants, Canadians hold significant reservations about the disruptive effect retail storefronts could bring to their communities.

Seventy-three per cent of Canadians believe that legalization will unclog the court system with needless cases and prosecutions for possession of marijuana for recreational use. An equal number believe legalization will provide marijuana users access to quality-controlled products that meet government requirements for strict production, distribution, and sale.

Despite this widespread understanding, concerns remain as July 2018 nears.

Our polling indicates that 44 per cent of Canadians currently support legalization, 37 per cent oppose. This lack of consensus suggests that both governments and producers have work to do. As a result, the response of provincial governments will show their best attempts at responding to these concerns.

Cannabis in Canada polling tells us a great deal about these motivating factors.

For example, government retail store fronts are the most popular model with support from 56 per cent of Canadian respondents.

In Ontario, the Wynne government, which faces re-election in June 2018, will be reluctant to delve into any controversial initiatives that distract from key campaign pillars.

Government retail outlets appear to be the route of least resistance. Their plan to distribute through a government-owned system and an online-based order service comes as no surprise. This model, they believe, allows the government to directly manage the output of legal recreational marijuana into the marketplace in a way that is reflective of current public opinion, which is a major motivator with less than eight months until Ontarians pass judgment on their current mandate.

The risk: if the government’s network of storefronts proves not to be consumer-friendly, black market producers and the current dispensaries operating in major cities will continue to thrive.

New Brunswick has taken a different approach. Premier Brian Gallant faces re-election, and therefore has been very vocal about his belief that the cannabis industry can drive economic growth. His government has created a Crown corporation to oversee sales, paired with two private cannabis businesses, and is procuring bids for retail solutions.

By working with established producers and market contributors, Gallant’s government feels it can balance social responsibility and provide a consumer-friendly product at a fair price.

A third approach, which is expected to be taken by British Columbia’s recently elected NDP government, will be forced to deal with the unique challenge of developing a legal framework in an environment where recreational marijuana is already widely distributed.

Remember, the City of Vancouver has provided business licenses to several existing dispensaries. Interestingly, only 46 per cent of British Columbia residents support legalization.

Understanding the potential impact of illegal dispensaries currently operating in communities will influence residents. This, of course, will be balanced with input from the active dispensaries, their customers, and ancillary businesses that advocate for a path to legalization. Premier John Horgan has expressed an understanding of this balance and has indicated that existing dispensaries will play a role in the province’s cannabis framework.

Regardless of the province, proper training for retail employees has emerged as a consistent priority for Canadians. Seventy-four per cent support the introduction of training and certification programs for marijuana retailers and 88 per cent believe such programs, if implemented, should be mandatory.

Political sensitivities, stakeholder management and catering to local environments will factor in all three government’s decisions about how to implement training programs.

Another voter concern that Canadian provinces will have to confront pertains to the location of storefronts. While only 37 per cent of Canadians actively oppose the legalization of marijuana, 50 per cent of all Canadians oppose a privately-owned recreational cannabis dispensary opening in their neighbourhood. Talk about NIMBYism.

All provincial governments will want to avoid any confrontation regarding concerns about proximity to schools and other community spaces. Provinces like British Columbia will be expected to develop rules to address these concerns.

While these evolving concerns will influence government activity in the coming months, ultimately, licensed producers hold responsibility for their own successes and failures.

After years of campaigning for legalization, licensed producers will be actively scrutinized by investors, regulators and concerned members of the public. If industry leaders are unable to adapt to a new regulatory framework and scale up to meet demand, Canadian concerns about the impacts of legalization are likely to worsen or remain unchanged.

As governments do the heavy lifting, licensed producers and other market participants should be working together to establish shared priorities and communicate collective commitment to responsible business practices that address health and safety concerns, while unlocking economic opportunities for communities.

If Canadians do not have the confidence in quality-controlled, regulated products, both governments and industry will share the blame.

The path towards successful legalization requires a collaborative and thoughtful approach that builds confidence among Canadians. Partisan politics will inevitably impact decisions on this subject. However, by understanding these pressure points producers will successfully set themselves on a path to respond to local concerns and to meaningfully participate in a safe, legitimate, and fairly-regulated environment.

Contributing writer Jaime Watt is Executive Chairman of Navigator Ltd.,
a national public affairs and government relations consulting company. 

This article first appeared in Policy Magazine on November 3, 2017.

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