Canada’s first year of cannabis legalization going out on a high – Toronto Star

It was the advice given many times to maiden pot users, emboldened by Canadian legalization to take their first tokes over the past year:

“Start low and go slow.”

But that urging for baptismal moderation on an individual level — particularly regarding concentrations and consumption of the plant’s psychoactive THC component — could easily pass as a description of the entire cannabis rollout.

As the country approaches the first anniversary of legal weed on Oct. 17, a look back reveals that many important elements of the deployment appeared to lurch and stagger over their first steps.

From persistent supply shortages, to tardy store openings, to lagging online delivery times, the industry straggled through the ballyhoo of hype and anticipation that accompanied legalization.

“It was a slow process on many levels,” Rod Elliot, a cannabis watcher and senior vice-president of Toronto consulting firm Global Public Affairs, told the Star. “But in many ways the problems we encountered were pretty much predictable.”

Among the important aspects of legalization that have been slow to materialize is the more muscular “drugged-driving” traffic enforcement that many Canadians had demanded in the lead-up to the new laws.

One of the most persistent worries expressed nationwide as the enabling Bills C-45 and C-46 were being developed and debated was that legal weed would cause chaos on the roads.

Promises of ramped-up enforcement have not been remotely fulfilled, MADD Canada CEO Andrew Murie said. “Not even close.”

Murie maintains that virtually every important element of roadside cannabis deterrence is still in early development.

For example, few of the promised oral-fluid devices slated to be the cannabis equivalent of alcohol breathalyzers are in use — with only two variations of the device having been authorized by the federal justice department, he said.

“The number of officers trained (as Drug Recognition Experts or DREs) is just coming up to speed. And the slowness of getting these oral-fluid testers at roadside and all the questions about them are really frustrating.”

Murie also points to the fact that many laboratory blood tests triggered by positive roadside screenings are taking six months or longer to process.

“And in a lot of police forces they can’t even get a blood draw when they have a suspect,” he said, explaining that, unlike alcohol, cannabis convictions require a positive blood test after the roadside screening.

“You had police in British Columbia saying (they) haven’t charged a single person yet,” Murie said in a recent interview.

Federal justice officials would not comment on the pace of the screening-device approval process, the length of time blood tests are taking, or the number of devices deployed nationwide.

For those numbers the department directed questions to Public Safety Canada, which said it keeps no such records and suggested reporters contact individual police forces or the device manufacturers.

Toronto police spokesperson Sgt. Brett Moore said in an email that his force had eight oral-fluid drug devices available to them as of last month. That’s compared to 10 station-based and 120 roadside alcohol breathalyzers.

As well, Moore said Toronto police have 19 DRE-trained officers, a number that fluctuates but has remained “relatively constant” over the years.

On the positive side, Murie said the number of officers trained across the country in the less rigorous Standard Field Sobriety Test (SFST) has increased significantly over the year. The latest Statistics Canada data also shows a slight uptick in the number of people being charged with drug impairments, he said.

Still, as of Oct. 7 Toronto police had recorded almost 700 alcohol-impaired driving arrests and only 48 of their drugged-driving equivalents. Just 11 of those drug-impaired violations involved cannabis.

Murie said there is not yet any data on whether accidents as a whole have increased since legalization.

He maintains there is little surprise in this halting pace, saying delays had been expected on the traffic-enforcement end.

“It’s not a surprise that these (problems) are out there,” he said, adding that he thought there would be more screening devices deployed by now.

“The numbers are low and it might take a couple of years before we see enough presence on the road to be a deterrent like there is for alcohol.”

That’s not to say a greater roadside deterrent isn’t needed now.

An ongoing study out of the University of British Columbia looking at blood samples taken from accident victims at trauma centres in four provinces shows cannabis impairment is a serious issue.

Of the 2,202 drivers whose blood was sampled since spring of last year, 15.7 per cent tested positive for alcohol while 18 per cent tested positive for THC, said Dr. Jeff Brubacher, who is heading the research.

“The raw numbers are higher than alcohol,” Brubacher said, adding that, unlike booze, cannabis can linger in blood for days and at levels that may not cause impairment.

Six per cent of those drivers had blood levels of THC above the two nanograms per millilitre that would trigger a $1,000 fine. Only 2.4 per cent had levels above the five-nanogram level that would bring an impairment charge. The number of drivers with the legal impairment .08 alcohol level was 12 per cent, Brubacher said, citing his research.

“So the numbers are a little bit smaller (for cannabis) at the higher levels,” he said, adding that they still show a need for effective deterrence measures.

The research is being conducted at major trauma centres, including the one at Toronto’s Sunnybrook hospital, using anonymously sourced blood from incoming accident victims. It was expanded from B.C. to three other provinces last spring in the lead-up to legalization.

For Elliot, the most important aspect of this inaugural year of cannabis was the growing public acceptance of legal pot.

“My first thought is that … average Canadians who maybe were apprehensive about legalization seem to overall have calmed down.”

That historic transition was reflected in a series of Pollara Strategic Insights surveys that saw Canadians’ disapproval of legal weed drop to less than 35 per cent this April from about 45 per cent in the year prior to October 2018.

The societal shift, however, was often bumped out of mind by the many pot holes the rollout encountered over the year, Elliot said.

“It may have been somewhat overshadowed by the immediate challenges of implementation on the ground,” he said. “The retail rollouts in provinces like British Columbia and Ontario, for example, have not gone smoothly.”

In Ontario — which transitioned abruptly under Premier Doug Ford’s Progressive Conservative government from an LCBO-run plan for its stores to a private-sector model based on a lottery — there will only be about 70 legal outlets serving the entire province by year’s end.

The major reason for these glacial store openings was fear of continuing product shortages that left some stores in other provinces woefully short of merchandise last fall.

Those product shortages, while often severe, were all but inevitable, Brock University pot expert Michael Armstrong told the Star.

There was no way producers could have grown and stockpiled enough cannabis during the lead-up to legalization to feed the market it created, he said. “It wouldn’t be reasonable to expect industry to have enough capacity on day one for the whole market.

“That would be asking industry ‘OK, we want you to build these massive factories and throw up these massive inventories without letting you have any revenue until October.’ ”

Some producers also fell flat in their planning, Armstrong said, particularly in their logistical preparations to grow massive amounts of product and get it out the door and onto shelves.

He said producers spent too much time on the “glamour side” of the business — wooing investors and building greenhouse footage — and not enough time on the more tedious tasks such as processing and shipping.

“I suspect some companies just kind of neglected that and it was only on day one … that they realized, ‘Hey, we don’t know how to do this.’ ”

As well, the industry was shackled by onerous marketing, sales and labelling regulations that were far more stringent than those governing alcohol, and that limited wild-eyed profit expectations, Elliot added.

Industry giants “have struggled with issues of corporate compliance and to meet investor targets. That’s been a real challenge, just managing expectations of investors,” Elliot said. He was referring to CannTrust’s compliance issues with Health Canada, and Canopy Growth’s ousting of its CEO.

“It’s also still a sector whose biggest competition is the black market,” he said. “That’s going to be an issue even after a year, that the industry is going to have to chip away at.”

This province’s online Ontario Cannabis Store earned scathing opening reviews when product shortages sent many potential customers back to their black-market sources and a promised one- to three-day delivery time stretched into a week or more for tens of thousands of customers.

Delivery times, via Canada Post couriers, have been pared back to an average one to three business days, according to the store’s site. Deliveries to some rural areas can take up to 10 business days, the site says.

Online ordering also suffered from a wave of privacy worries, especially about border crossings into the United States.

“The concerns over privacy and border crossings really did impact the rollout of the online sales of cannabis,” Elliot said, referring to Canadians’ fears that U.S. officials would discover their online purchases and deny them entry into the country.

“That actually surprised me, how concerned people could be about purchasing cannabis online.”

For the brick and mortar stores that did get going in Ontario, however, business was booming.

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“It’s easy to identify the highs,” said Hunny Gawri, owner of the Hunny Pot Cannabis Co. on Queen St. W., the first store in Toronto to open its doors April 1.

“The lows we just saw as challenges,” Gawri, one of 25 people and companies to win the original Ontario lottery to seek store licences across the province, told the Star.

He said predictions that those original lottery wins would be the financial equivalent of scoring a 6/49 jackpot have largely proven true.

“The first six months have definitely been great, lucrative in a sense, for sure,” he said.

But his financial fortunes are also due in part to being in a small pool of merchants — there are still only five legal stores in Toronto — and he expects to see a revenue drop as more pot shops open, he said.

“Just like any business, it’s simple economics, (if) there are more places for people to go it just means less for places that exist.”

Gawri, who said his store has not had issues with shortages so far, is hopeful that the introduction of edible products over the coming months will counter revenue drops due to increased competition.

“We’re calling it Cannabis 2.0. And having a new product line means a new consumer base.

“It means people who weren’t coming to the store now are going to be coming to the store.”

Like the combustibles, the edible products that will be legalized this Oct. 17 and that will appear for sale over the coming months will follow the “start low, go slow” program. Far from the cornucopia of pot wares sold in some U.S. states — where everything from dissolving breath strips to cotton candy can be had — many licensed producers here have chosen to concentrate on a small core of offerings, Elliot said.

Edibles — an amorphous category in the pot business that includes beverages as well as vaping and topical products — are expected to quickly consume as much as 60 per cent of the legal cannabis market in Canada. A recent Deloitte report estimates this next generation of cannabis products will be worth $2.7 billion a year in Canada.

Beginning Oct. 17, licensed producers can submit their edible products to Health Canada. They will then undergo an approval and procurement process that is expected to last between 60 and 90 days.

“But rather than states like Colorado or California, where there are dozens and dozens of different types of products, (Canadian producers) will probably cherry-pick the top sellers in those jurisdictions and present those to customers first,” Elliot said.

Toronto lawyer Matt Maurer, vice-chair of the cannabis law group at the firm Torkin Manes, said most of the first year’s legal confusion came at the provincial level, where decisions were made on how to implement the federal laws.

“We had provinces figuring out, ‘How are we going to do retail? Is it going to be public, is it going to be private, how are we going to allocate the stores?’ ” Maurer said.

“And then we (had) Alberta coming out and putting a pause on the stores and Ontario flipping from public to private and then going from an application system to a lottery.”

On another legal front, Maurer said several producers have been accused of pushing the regulatory limits to get more product to market. At least two have had their licences temporarily suspended.

As for the federal goal of eradicating the marijuana black market — one of legalization’s cardinal purposes — real strides have been made in the past year, Maurer said.

“I think they’ve done a good job so far … I’ve heard as much as 50 per cent,” he said, cautioning that there’s no reliable way to measure illegal sales.

For Jo Vos, managing director of the cannabis resource firm Leafly Canada, the year has produced significant successes, especially on the financial side.

“The industry’s growth has been remarkable, growing by nearly 185 per cent in just 10 months …” Vos said in an email. “Clearly the demand is strong for the legal market, which is all the more impressive considering that consumers have to stickhandle a patchwork of regulations that are often barriers to the marketplace,” she said.

Like Elliot, Vos points to the rapid erasure of the stigma surrounding cannabis as another pot positive.

“It’s been incredible to see — and smell — cannabis in public spaces throughout Toronto and Canada this past year,” she said. “I think legalization has shown many Canadians who may have been opposed to it at first that the sky hasn’t fallen.”

Legalization has allowed Canada to take a global lead in research into marijuana in a number of disciplines, Vos said.

“Organizations like the Toronto Cannabis and Cannabinoid Research Consortium and McGill University’s newly opened Research Centre for Cannabis will shed light onto an array of potential medicinal applications, health and safety issues and the impact of cannabis on our economy,” she said.

“Scientific study will be critical to furthering our understanding of how cannabis can play a role in people’s lives.”

On the negative side, the legal market is still having trouble competing with its better-stocked and cheaper illicit counterpart, Vos said.

“Despite statistics suggesting that the illicit market has decreased … since legalization, stringent regulations, supply issues and reports of poor quality continue to stifle the ability of legal retailers and brands to compete,” she said.

“The illicit market also provides convenience and ease for consumers through illegal delivery and online mail-order services — if the legal market is expected to compete, we need to be able to innovate with technologies and services that consumers expect with virtually every other consumer product.”

Another downside: the industry virtually ignored Canada’s Indigenous populations in the first-year rollout, Vos said.

“The Ontario government has green-lit eight retail licences within First Nations jurisdictions — a positive step,” she said. “Yet many First Nations communities have indicated that they want jurisdictional autonomy over whether and how to build successful cannabis businesses that would address concerns about public safety while boosting local economies.”

In the end, decriminalization for Canadians is the standout upshot of the past year, Elliot said.

“The legal protection that the government has now provided people … is so much better than really any other jurisdiction in the world right now,” he said. “And I think that really has been something that people have overlooked.”

Armstrong, who has pointed out many of the rollout’s misses, considers the year a success.

“Lots of commentators, including me, complained about many things,” he said. “But the world did not fall apart, there is legal product, there are legal stores so, hey, that’s a good start.”

Joseph Hall

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