Canada poised to approve legal marijuana sales; pot shops could be open by late summer

Canada’s government is poised to approve sweeping cannabis legalization as soon as this week and could launch marijuana sales by late summer.

The Canadian Senate, the members of which are appointed rather than elected, is likely to OK a legalization measure Thursday after years of quiet study and discussion. After House approval, Prime Minister Justin Trudeau’s government expects to launch legal sales as soon as 10 to 12 weeks from now.

Canada’s approach differs from that taken in the USA, where nine states and the District of Columbia have legalized cannabis, but there hasn't been a substantive national discussion about the widely used drug. As part of legalization, the Canadian government will probably inform citizens that admitting to marijuana use might get them barred from crossing the border into the USA, which classifies cannabis as a Schedule 1 drug with "no currently accepted medical use and a high potential for abuse," according to the Drug Enforcement Administration.

“We’ve very much learned from the early mistakes made by some U.S. states and other jurisdictions,” said Canadian Sen. Tony Dean, an independent who sponsored the bill in the Senate. “We know we have a national challenge with cannabis. We have some of the highest youth consumption rates in the world, an illegal cannabis market worth upward of $6 billion annually, we know it’s harmful for kids, especially younger kids … and we had a government that wanted to tackle those issues.”

Trudeau and his Liberal Party included marijuana legalization as part of their 2015 campaign, and his government has worked toward creating a structure for recreational cannabis sales and consumption since taking office. Medical marijuana has been legal in Canada since 2001, and many U.S.-based cannabis companies have jockeyed for position in that market with an eye toward broader legalization.

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Recreational marijuana sales in Canada could be worth $3.3 billion by 2027, in part because businesses will find it easier to work nationally, instead of piecemeal like in the USA. Uruguay is the only other country to legalize marijuana; many countries have decriminalized it but prohibit sales.

Canada’s regulations, which are being finalized, would permit people as young as 18 to buy marijuana from regulated stores and to grow small amounts at home, depending upon which province or territory they live in. The draft rules call for setting aggressive targets for reducing youth cannabis use, creating national standards for potency testing and packaging and setting tax rates low enough to undercut the black market.

By legalizing marijuana at the federal level, the Canadian government sets the stage for more traditional investment while assuring entrepreneurs they can use banks like any other business. In the USA, many cannabis companies must conduct their operations with cash because banks worry the federal government will target them as drug traffickers.

“Canada is creating a normal industry. What we have in the United States is a very abnormal industry,” said Roy Bingham, the CEO and co-founder of cannabis data firm BDS Analytics. “In Canada, you see tobacco, alcohol, pharmaceutical companies, all these mainstream industries interested in getting involved.”

Bingham said many European countries are closely watching how legalization rolls out in Canada, even though California has more residents and a bigger marijuana marketplace: “It’s a respectable, well-regulated country with a democracy that people admire.”

That’s bad news to Kevin Sabet, who runs the U.S.-based anti-legalization group Smart Approaches to Marijuana. Sabet has consulted with Trudeau’s government about his concerns over marijuana edibles, potency and the speed at which the country is moving toward broader cannabis access. His group warns that widespread marijuana legalization will create an industry similar to “Big Tobacco” with untold public health costs.

“They’re being more deliberative than the U.S., yes, but that doesn’t mean they have the secret sauce,” Sabet said. “There are considerable concerns with how Canada is normalizing marijuana.”

The plan discussed by the Canadian Senate this week lacks one major policy point many advocates pushed for: expunging the criminal records of people convicted for minor marijuana crimes. In California, which launched legal sales Jan. 1, some prosecutors wiped away those records, and prosecutors in Seattle seek to do the same.

Dean said the Trudeau government assured the Senate it would address the issue of criminal records once the law was in place. He said that after decades of prohibition, Canada’s government is ready to treat marijuana and its users differently.

“It’s a sophisticated piece of public policy that focuses on tackling challenges that were decades in the making,” he said. “We were frankly looking the other way for decades.”