Canada: 1st anniversary of cannabis legalization

Happy birthday Canada! One Year after cannabis legalization, A report on the deployment of its regulation in Canada.

As predicted, the legalization of cannabis in a country the size of Canada has not gone according to plan: shortages, variable quality, restricted opening hours... While there's no question of turning back the clock, this is nevertheless an opportunity to highlight areas for improvement. After all, this was only the first year of legalization after 95 years of prohibition.

Health and prevalence

It will be several years before we have a clear picture of the effects of cannabis legalization on the Canadian healthcare system. Few statistics are published but between 2017-2018 and 2018-2019, hospitalizations at CHU de Québec among 10-24 year-olds for cannabis use fell from 18 to 6. Road accidents involving cannabis don't seem to have increased either.

Consumption among young people has not budged, and the’overall increase in cannabis consumption from 14 to 16% among adults seems to have more to do with a greater ease of talking about one's consumption than with a structural increase. The increase is particularly noticeable in men over 45. and over-65s. Instead of the little cousin at CEGEP, it's Granny Gagnon who lights a log to soothe her rheumatism.

Legal sales and the black market

In total, legal cannabis sales reached $100 million per month. The industry also generated C$8 billion in GDP. A recent study estimates that 10% of consumers consumed two-thirds of the cannabis sold legally, a category of people not to be overlooked in limiting the persistence of the black market.

The black market has not disappeared, not least because large-scale consumers are more sensitive to price, the various shortages that have plagued the rollout of legalization and the lack of choice in varieties and products. Legal cannabis is on average 80% more expensive than illegal cannabis. Based on a consumption of 30g per month, that's a difference of 120 coins per month, a non-negligible annual budget.

Distribution channels also differed by state. Where Alberta has 254 privately-owned stores, Ontario has just 25 and Quebec 21, and both provinces have announced plans to increase this to over 40 by the first quarter of 2020. In total, there are around 400 stores in Canada, whereas Colorado, with 15% of the Canadian population, has opened 560. Difficult access to cannabis complicates consumers' transition to the legal market, while its pusher can be home in 30 minutes.

Exchange

If there was one major negative effect of cannabis legalization, it was on the stock market prices of licensed producers (LPs). While there was a senseless pre-legalization bubble, which mainly benefited first-time investors, the latter quickly sold off after October 17, 2018. It's rare to have such a cut-off date in a market, and therefore an opportunity to sell at the very top at the same time.

In addition, the production and sales promises announced by LPs turned out to be «slightly» over-inflated, which also led to a fall in share prices. From scandals like CannTrust or the’Canopy Growth CEO ousted also dented market confidence.

Industry consolidation is set to continue for several years yet, as new regulations are rolled out in the wake of the global financial crisis. edibles and concentrates and the distribution of new production licenses, which will automatically bring in new players.

Legalization 2.0

The first anniversary of legalization also marks the coming into force of the cannabis legalization 2.0, This new market segment will be more in line with consumer demand, and even with the interests of people who don't smoke cannabis. This new market segment will better meet consumer demand, and even the interest of people who don't smoke cannabis, while continuing the fight against the black market that today supplies Canadian consumers with a wide range of cannabis products. spaces cakes and other dabs. However, the products are not expected to arrive in stores before the end of 2019.

Who benefited from legalization?

And finally, who benefited from legalization? We had in fact nipping suspense in the bud in July 2018, explaining that legalization would benefit more the anti-cannabis fighters who got on the boards of the big growers, or the already established and well-funded big growers, but not the small growers or those previously convicted of offenses that are no longer offenses. And we were right.

A whole area of social justice has been overlooked in Canadian regulation, in favor of CA forecasts and regulatory concreting that still prohibits cannabis in law, but provides for strict exemptions (possession, transport, production, processing...).

However, we mustn't forget the consumer, who can now buy legal cannabis in a store, sometimes with little choice and variable quality, but with clean cannabis. Our experience at SQDC was actually quite pleasant. The public branches are not yet up to the level of Dam's coffees, Barcelona's CSCs, and a long way from California's dispensaries, but it's a good first step.

One final impact of cannabis legalization in Canada: showing the world that another way of regulating cannabis is possible. Visit Mexico should legalize cannabis within a few days, the New Zealand in 2020, the Luxembourg before 2022, l’South Africa also quickly (personal use is already legal), the United States, champion of prohibition, is now at the forefront of legalization, with 11 states having legalized and 33 allowing medical use... The need for prohibition has largely passed.