Nearly 2 Years Since Canada Legalised Cannabis - Has The Project Been A Success?
Canada’s 2-year cannabis anniversary falls on New Zealand’s cannabis referendum date
Back in 2018, Canada became the first industrial nation to legalise recreational cannabis, and the second country to do so behind Uruguay. October 17 will mark two years since Canada’s historic move, as well as the date New Zealand will become the first country to ask citizens whether recreational cannabis should be legalised.
If Kiwis vote Yes to the Cannabis Legislation and Control Bill on 17 October, the bill will then go through the normal parliamentary process. If voted for, it will become law.
But in the meantime, New Zealand can learn a lot from Canada’s cannabis journey over the past two years. In this post, we’ll look into Canada’s legal cannabis project so far to determine if it has been a success.
Canada’s legal cannabis journey - 2 years later
Canada’s legal cannabis landscape was a campaign promise, much like NZ Prime Minister Jacinda Arden’s referendum promise. But while the outcome of New Zealand’s upcoming cannabis referendum is yet to be seen, Canada is almost 2 years into its fulfilled legal cannabis legislation.
So far, Canada has encountered some bumps in the road, but for the most part, legal cannabis has been a success.
Let’s dive into the bumps in the road first:
Cannabis license backlogs
Canada prioritised government oversight with strict regulation to ensure quality control in the legal cannabis market. This resulted in a license process that has caused backlogs. In January of last year, shortly after legalisation, Health Canada already had a backlog of 800 license applications for cannabis cultivation, processing, distribution, and sales. In short, this slow approval process has boggled things down, contributing to cannabis shortages.
The strict regulatory and approval process has also led to cannabis supply shortages. While businesses wait for license approvals to cultivate, process and distribute cannabis, retail dispensaries are left without enough cannabis stock to fulfill demand.
But it isn’t all bad news. In fact, the good news surpasses the bad news, even though things could be better:
Huge sales, even during COVID-19
Statistics Canada has pegged Canada’s July cannabis sales at $104 million. That’s in July of this year alone, despite the coronavirus’ global economic impact. As of last June, there had been 9,976 kilograms of dry and 9,614 litres of oil legal cannabis sales in Canada, compared to 2,151 kilograms and 4.652 kilograms respectively, in June 2018 when only medical cannabis was legal.
Legal sales slowly taking bites off the black market
Canada promised legal cannabis will significantly reduce the underground illegal cannabis market. While the black market is still alive and well in Canada, legal sales have slowed it down a bit. As of June of last year, legal sales accounted for around 26 percent of cannabis sales in Canada - a market which was once dominated by the black market.
Canada’s legal cannabis market is slowly eating into the illegal black market. src
What NZ can learn from Canada
Canada has been a welcome example for New Zealand’s legal cannabis aspirations. One significant lesson to learn from Canada’s 2-year legal cannabis journey is that over-regulation will cause red tape, which could result in significant shortages in supply.
New Zealand has taken a government oversight approach to legal cannabis as well. Here’s a look at some of the many restrictions that will be imposed on potential cannabis businesses if the bill becomes law:
- Initially, only flowers, plants and seeds will be legally sold - no edibles and concentrates until later, which will require more requirements be fulfilled
- Cannabis products can not contain more than 15% of THC
- The higher the THC in the product, the higher the tax
- Advertising cannabis products is prohibited
- Companies will have to choose between selling or growing cannabis - not both
- Companies will be limited on how much cannabis they can get from the national stock
- Imports and exports of cannabis will be prohibited.
These restrictions are great for quality control, but they might cause a slow start to New Zealand’s cannabis market if the referendum results in a legal cannabis market.
Final words - NZ might have a smoother start than cannabis
New Zealand might have an answer to the potential slow start. If the majority of voters say Yes to the Cannabis Legislation and Control Bill on 17 October, it will not become law immediately. The vote will only push the bill through the normal parliamentary process, where it will go through readings, revisions, and a vote before having a chance to become law. That process should give the government plenty of time to iron out any potential kinks that might cause some bureaucratic red tape and hinder potential businesses seeking licenses.
But none of this will be the case if you don’t go out on 17 October and vote Yes. With recent opinion polls showing a tight race between supporters and opponents of cannabis reform, every vote will have a significant impact on the future of cannabis in New Zealand.