Cannabis year one: Canada celebrates 365 days of legalization

Oct 17 2019, 8:33 am

Recreational cannabis has been legal in Canada for exactly one year on October 17.

It has been 365 days of ups and downs, as the country tried its level best to figure out a new regime for the control, distribution, and sale of adult-use cannabis.

A year later, cannabis has grown in prestige and worked its way into various facets of politics, business, and culture. Let’s take a look at some of the biggest hits of the year.

The roll out

October 17, 2018, came and went with a smokey bang. Excited enthusiasts and victorious activists celebrated in a lingering cloud of accomplishment.

The excitement was palpable but tempered by the reality of the situation on the ground. Well before “Legalization Day,” it was pretty evident that there would be problems. Provinces asked the federal government for more time, but the Trudeau Liberals pushed forward.

The very first problem faced by almost everyone across the country was access. From Vancouver to Halifax, there were only so many stores open that people could actually get to.

Alberta, after a rough start, recovered gracefully. By far they have the most stores open in the country, while other provinces, like BC, remain woefully underserved.

Ontario went from the Wynne Liberals to Ford Conservatives just a few months before legalization and the new premier steered the province away from the planned brick-and-mortar Ontario Cannabis Stores to a private system.

Instead of an October opening, Ontario was given until April 1, 2019, to spin up a licensing system. They opted for a limited number of licences, distributed through a lottery. Ontario customers who ordered legal products online through the OCS website faced weeks-long delays as both the postal service and the OCS tried to process and deliver the orders.

Supply problems

Almost immediately there were supply problems. Cannabis simply wasn’t getting onto shelves to keep up with demand, lines persisted, and customers generally had limited options.

Many licensed producers struggled to meet their commitments, while others, caught up in regulatory, and even packaging problems, simply couldn’t get the harvest to market.

The problem caused a temporary freeze in retail licensing in Alberta, and Quebec — who put in place a public retail system — began limiting hours extensively at their SDQC locations.

Getting ready for edibles

Much of the year was spent talking about the day, October 17, 2019, that edibles, beverages, concentrates, and topicals would be added to the list of approved cannabis products.

Now that it’s here, companies have to submit their products to Health Canada for approval. The release of drafted regulations throughout the year allowed for updates, but now Canadian companies have to test the regulator and find what will be allowed.

Health Canada must be notified 60-days before any product can be sold and therefore nothing will be available until after that cut off. The 60-day rule is not a time limit, and products may not be available until after the waiting period is over.

This means the earliest Canadians can expect to see the new wave of cannabis products is mid-December.

Road bumps

There has been little nefarious activity taken on the part of cannabis companies, despite early fears that organized crime would make its way into the industry.

Two significant events seemed to encapsulate the bulk of headlines when it came to skirting the law.

First, Bonify, a medical cannabis supplier was the subject of an investigation by Health Canada after a whistleblower reported a large amount of cannabis being bought out of province from an illegal seller.

According to a Health Canada statement sent to Daily Hive, in November of 2018, the regulator received an email complaint alleging wrongdoing by Bonify.

A week later, Bonify initiated a recall of two lots of cannabis products sold to the public for which they were unable to verify if the required laboratory testing had occurred.

The second major incident involved CannTrust, another medical supplier of cannabis. Problems started for the company after a surprise inspection by Health Canada of CannTrust’s greenhouse facility in Pelham, Ontario revealed it had been growing cannabis in rooms not approved by the agency from October 2018 to March 2019.

The company lost its compliant rating at the Pelham facility as well as at a second facility in Vaughan, Ontario. It also dismissed its then-CEO, Peter Aceto, “with cause.”

In October, CannTrust announced that it would be destroying approximately $77 million worth of product and plant materials as they attempt to reach compliance.

Brass tax

A year after cannabis legalization, there have been some heartening numbers related to the industry. Many companies are still not earning revenue, but over all, Statistics Canada report the industry has added over $8 billion to Canada’s Gross Domestic Product after the third fiscal quarter of 2019

The latest numbers, released Monday, show that the cannabis industry added $8.259 billion to the economy between when the products became legal in October 2018 to the end of July 2019.

This is up from a reported $7.02 billion when legalization started.

Beyond a few hiccups, the champions of the cannabis market remain the unregulated sellers. According to Statistics Canada’s own reporting — using the Stats Cannabis crowdsourcing survey for Q3 of 2019 — the legal national average price is somewhere around $10.23, while the unregulated market is estimated to be an average of $5.59.

There are moves to offer cheaper legal products, but overall, optimistic estimates peg over 70% of cannabis sales still taking place outside the legal system.