When Canada enacted nationwide cannabis legalization back in October of 2018, many people believed that their move would speed up the timeline for the United States’ federal government to follow suit and stake their own claim in an untapped global marijuana market worth hundreds of billions of dollars even in its infancy.
Well, here we are nearly halfway through July of 2019 and while there has been some progress made on the federal front of the cannabis reform movement here domestically, and even more progress made state-by-state, it appears that the dysfunction in D.C. will keep nationwide weed legalization out of reach for the foreseeable future.
As soon as Canada went legal last fall, we witnessed a flurry of activity both in the news and in our inbox of moneyed interests from north of the border looking to boost their own brands by investing in or buying out established cannabis companies in the U.S. who are tired of waiting for our own government to do the right thing. We’ve seen Canadian cannabis companies go public and sell shares on the stock exchange. We’ve watched Canada export cannabis across the Atlantic Ocean to foreign markets in need of their boofy weed. Quite literally trillions of dollars of cannabis investment capital has crisscrossed the U.S./Canada border in a very short amount of time.
For over eight months it seemed that Canada’s head start on America may be insurmountable, but the headlines have started getting more ominous, and the too-good-to-be-true offers have stopped spamming our email as reality is setting in on the Canadian cannabis market exposing a level of corruption and upper echelon incompetence that those of us in California recognize all too well.
After all, Cali “legalized” weed in a 2016 vote and the market was limping right along by October of 2018. California boasts the world’s 5th largest economy, behind only Germany, Japan, China, and the U.S. (minus California). Notice that Canada is not on that short list, but their current crop of problems sure do mirror a lot of what we see crippling California’s cannabis market.
(SOMETHING) & DEMAND
Supply issues began almost immediately, literally, in Canada with headlines to that effect cropping up just days after the country went legal, and resprouting seemingly every month thereafter. The government neglected thousands of the legacy growers and sellers who spent decades pushing the plant toward legitimacy only to be left out of the market once it became accepted. Instead, huge cultivation contracts were awarded to the Wolves of Weed St. like Canopy, Tweed, and others.
Sound familiar, California? Cali hasn’t faced supply issues, yet, at least not on the legal side. That’s because the vast majority of cannabis consumers in the state still rely on less-than-legal sources when they re-up their stash and many people will tell you that supply (of good weed anyway) is an issue on that side of things.
Just this week we got news that Canadian cultivation company CannTrust had 12,700kg (roughly 28,000 pounds!) of weed placed “on hold” by Health Canada after it was discovered that the cannabis in question was grown in a series of greenhouses between October of 2018 and March of 2019 before the company had finalized the licensing process. What will happen to the poor, innocent buds is unknown, but CannTrust is warning the market of a potential disruption in supply if that evidence never makes it to the market.
This presents so many problems, not the least of which being the fact that when the literal root of the entire national supply chain – cultivation – is controlled by a small number of license holders, any fuck up or scandal with any one of them can dry up supply and cripple the marketplace.
We are watching the same thing unfold here in California as the state has allowed companies to “stack” cultivation licenses to get around square footage limits and create seas of mids up and down the state. Just like in Canada, many of the best Cali growers are skipping the legal market experience and either going back into the shadows or just calling it quits after so many years.
Furthermore, the Canadian government allows for online ordering and delivery by mail which sounds convenient, but comes at the cost of hurting storefront dispensary owners and further erodes the country’s cannabis culture as the human element is stripped out of “the deal”.
Meanwhile raids continue on unregulated growers and dispensaries, regardless of how good their intentions are.
In California, or in Canada?
The similarities to our own situation here continue.
In the years leading up to October of last year, Canada had established a robust, quasi-legal cannabis market that, while flawed, was at least functional for most consumers. While the plant remained technically illegal, it became a lower and lower priority for law enforcement, with both the cops and the courts mostly looking the other way when it came to minor pot possession and pushing.
Just like in Cali, the Canadian cannabis culture shifted in the early 2000’s when the term “medical marijuana” entered mainstream lexicon. Though almost purely anecdotal in those early days, the whispers of the plant’s potential medical benefits helped to quietly justify a boom of grey market retail dispensaries, public advertisements, websites, and more. Law enforcement both there and here continued to employ more discretion to distinguish MMJ patients from actual criminals, though, way too many people were still getting popped and that was a problem that legalization promised to solve.
NOT EXACTLY THE SAME
When a state passses new cannabis legalization measures, a bright light shines on the hypocrisy of the past War on Weed and the negative impact that it had on so many people. To correct this injustice, cannabis advocates are demanding expungement terms along with any proposed law changes. California has essentially left the issue of expungement up to individual municipalities to enact, with the state vowing to recognize any updated results and records. So, a growing number of cities and counties have made it incredibly easy for those who have low level misdemeanors or cannabis-related felonies from their past still haunting them now to get those charges or convictions either lessened or omitted completely from their permanent criminal records.
In Canada, on the other hand, Trudeau’s government merely “suspends” such records rather than clearing them through expungement, a shortsight that leaves an estimated 500,000 Canadians and their records at the whim of whoever is in charge next and however they feel about weed.
Another major difference between Canada’s cannabis laws and the recreational cannabis legalization we have seen passed here in Cali and in 10 other states so far here in the U.S. is the minimum age at which residents are allowed to consume, possess, or (most importantly) purchase legal recreational weed. In Canada, you only have to be 18. Here in the U.S., those 11 states have unanimously enforced a minimum age of 21.
An estimated 38% of college students, most of whom are between the ages of 18-21, use cannabis and our state laws, as progressive as some of them are, leave those consumers to fend for themselves in the black market. You personally may feel that 18 is too young for a person to be blazing buds but a society like ours that will let that same 18 year old smoke a cigarette, go to prison, or go to war really has no morals to lean on in this case.
CULTURE vs CAPITALISM
As Canada’s cannabis industry comes down off an eight month high, it will be interesting to see if they continue to import California’s culture-killing business model as their national market expands and our regional one waits for Washington D.C. to wake up.
Right now, the only weed being exported out of California is being done so illegally, and there are no Cali-based companies being traded on Wall Street (yet). But the Canadian government, the U.S. federal government, and every government worldwide would do themselves a big favor by looking at how legalization in California has wobbled out so far, and what they may be able to do to avoid some major pitfalls when taking legalization large-scale.
Similarly, as our nation edges ever so slowly toward ending prohibition, we should beware of the government takeover of cannabis that is happening in Canada now that it is “safe”. Just look at what our lawmakers have done with an issue as innocuous as health care, turning it into a political pawn while those in need suffer.
A DOUBLE EDGED SWORD
Despite enacting illogical measures like bland packaging requirements that do nothing but cut away at the culture that birthed the industry, Canada has already raked in over a billion dollars in revenue in less than a year and they haven’t even allowed edibles or extracts yet! There is a good chance that they will triple that total next year once they roll out those increasingly popular forms of consumption.
Compare that to Cali who has a higher population than Canada but has yet to even approach a half a billion in annual legal cannabis revenues.
Though they will always want more, more, more, the lucrative returns so far are likely to lull Canada’s decision makers into an apathetic stupor when it comes to caring about the pesky culture, and what they may be able to do to preserve it.
That is our fear for the future of nationwide legalization here in America. In fact, it is happening already. Here in Cali, the gap between the legacy farmer who cannot even afford the state’s application fees and a company like Caliva hiring a billionaire rapper from New York to push brand influence thousands of miles from home is wide, and growing. ‘Cannabis culture’ means different things to different people, for sure, but I think most of us can agree that Martha Stewart marijuana and greenhouses kicking out 27,000 pounds of mids ain’t it.