Canada legalizes marijuana for recreational use
Already there are worries about a shortage of legal cannabis for sale in the early months of legalization and a lack of retail outlets.
OTTAWA – Canada becomes the first major industrialized country to fully decriminalize cannabis for recreational use on Wednesday, fulfilling a 2015 election pledge from Prime Minister Justin Trudeau in a process that has proven massively complex and remains fraught with uncertainty.
Concerns abound. Already there are worries about a shortage of legal cannabis for sale in the early months of legalization and a lack of retail outlets, leading to a possible boom in the illicit marijuana trade the new law is designed to thwart.
Canada's 12 provinces and territories are tasked with regulating the distribution and sale of cannabis, and they are adopting a range of differing approaches. And Canadians crossing into the United States may be barred entry if they admit to using cannabis.
Under legislation passed by Canada's Parliament in June, it will no longer be illegal for adults to purchase, possess or grow recreational cannabis, starting Wednesday.
It is a far broader legalization process than what's taken place so far in the United States, where nine states and the District of Columbia have legalized recreational pot. Federal law in the U.S. still treats it as an illegal Schedule 1 substance, considering as dangerous as heroin and LSD.
New Jersey Gov. Phil Murphy campaigned on legalizing marijuana for adult recreational use, but his plan — which he had hoped to have in place during his first 100 days — appears stalled in the state legislature. Bills are pending in Pennsylvania and Delaware to allow recreational use but are unlikely to be adopted this year.
While Canada's federal government has changed Canada's criminal law and is now responsible for licensing commercial cannabis growers and authorizing their products, the provinces are in charge of regulating distribution and retail sale of marijuana.
In Ontario and the Western provinces, sale of cannabis will be left largely to licensed privately operated retail outlets. In Quebec and most eastern Canadian provinces, marijuana will be sold only in state-run stores, in the same way alcohol is sold. In most of the country, the legal age will be 18 or 19, the same as for alcohol, but Quebec has promised to boost the cannabis consumption age to 21.
In Ontario, the most populous province, the only way to buy legal pot as of Wednesday will be by mail-order. That's because permits for private outlets are not expected to be issued before next spring after recently elected premier Doug Ford decided to reverse earlier plans to sell cannabis through government-owned stores.
In neighboring Quebec, there will be a dozen outlets open while in British Columbia, there will be just a single provincial store although it is expected that cannabis will still be available in privately owned storefronts where sales have long been tolerated.
Federal law also will allow adults to grow four plants apiece for personal consumption, but Quebec and Manitoba intend to ban personal growing outright. And foods containing cannabis oils, like cookies and candies, will remain illegal for the next year until the Canadian government completes its regulatory regime for edibles. In the meantime, they are apparently easily available through illicit sources.
Several provinces have already complained that cannabis producers have shipped less product than anticipated, which could lead to product shortages.
Vic Neufeld, chief executive of Aphria Inc., one of the top producers, told investors last week he expects shortages of product to occur for two or three months until production increases and there is better understanding of consumer demand.
"It's like trying to merge a five-lane highway into a one-lane country road," he said. "It's tough to get everything through the bottleneck on a timely basis."
The anticipated shortage of cannabis through formal retail outlets could be a major boost for black market providers, according to Anindya Sen, an economics professor at University of Waterloo. He notes that many of these suppliers already use websites, apps and even home delivery for their offerings.
"My fear is that in provinces like British Columbia or Ontario where we have no retail access, it will be easy to" find illicit suppliers online, he said in an interview. "You put in your postal code and up pops a legal supplier or a guy in a truck."
Despite the hiccups, Sen said he believes Canada has an opportunity to take a leading role in an emerging industry. "A lot of European countries will be looking at what is happening here," he said. "If Canada gets it right, it could be a world leader" in creating systems to produce and process commercial amounts of cannabis.
Already, there is a surge of stock market interest for Canadian cannabis producers who have floated their shares. Despite the fledgling nature of the industry, the value of the shares has surged with market capitalization of the top five producers reaching $40 billion, a situation seen by some as a bubble. Many legal U.S. growers are undergoing reverse takeovers with Canadian shell companies to go public and take advantage of the red hot market.
Cannabis legalization is one of Trudeau's signature issues, although implementation has proved more complicated than anticipated. In the past, he has admitted to smoking "five or six times" but claims he never enjoyed it much. A spokesman said any consumption by the prime minister took place "many years ago" and Trudeau has no plans to purchase or consume cannabis once it is legalized.
For Canadians crossing the border into the United States, the situation remains risky for anybody who uses cannabis, even after the law changes. "Anybody who admits to having violated the law relating to a controlled substance is inadmissible to the U.S.," according to U.S. Customs and Border Protection.
Len Saunders, an immigration lawyer in Blaine, Washington, who specializes in cross-border issues, said Canadians crossing the border are placed in a difficult position. If they are asked by a U.S. border official whether they have used cannabis and admit they have, they may be barred entry. If they deny having smoked marijuana and are found out to have lied, they are in even more serious trouble.
What Saunders suggests to his clients who have smoked is not to answer a cannabis question from a border officer, which is the individual's right. But the Canadian should not to attempt to cross the border that day.
U.S. citizens have no such risks because U.S. officials cannot legally bar a citizen from entering the country, Saunders said. But Customs and Border Protection last week agreed to relax its position related to Canadians working in the cannabis production business. Previously, they were to be barred entry. Now, they can enter the United States.if they are traveling for reasons "unrelated to the marijuana industry."
For more news about medical and recreational marijuana, visit Philly.com/cannabis
Inquirer staff writer Sam Wood contributed to this story.