Article by Trina Fraser, Lift
The big news recently has been the Liberal government’s supposed timeline for cannabis legalization, along with some details of what legalization will look like. A report from the CBC stated that legislation will be introduced the week of April 10, with legalization in effect by July 1, 2018. Legalization point man Bill Blair has since stated that July 1, 2018 is an “aspirational date.”
This puts Health Canada’s feet to the fire on the production side of the equation. No one was surprised to hear that production will be federally regulated, presumably through a beefed-up version of the licensed producer regime under the Access to Cannabis for Medical Purposes Regulation (ACMPR). But we are going to need exponential growth of existing production capacity in order to meet recreational demand. Health Canada is going to have to allocate significant new resources to process the ever-increasing number of expansion requests from licensed producers, and to finally get through the backlog of 422 ACMPR applicants still waiting for a licence.
The more interesting discussion is on the distribution and sales side. As expected, reports confirm that the retail sale of cannabis will be handled on the provincial level. Surely provinces are already knee-deep in considerations, but having a retail system operational in every province by July 1, 2018 is incredibly ambitious.
One way that the government might intend on meeting this timeframe is a phased-in approach to the sale of recreational cannabis, for example allowing initial delivery by mail only, while the storefront model works itself out across the country. In its final report, the Task Force on Cannabis Legalization and Regulation recommended including a direct-to-consumer mail-order system. The task force viewed delivery by mail as important to mobility-challenged individuals and to individuals in rural and remote communities where a physical store might not be viable. The task force also identified a phased-in distribution option.Licensed producers appear to support mail delivery. This is not surprising. It permits them to sell direct to consumers at retail prices, instead of selling at wholesale prices to dispensaries (whether privately or publicly owned). It also enables licensed producers to market directly to their customers and overcome some of the obvious brand development challenges in an industry where marketing to the general public is limited.