Ottawa’s plan to roll out legalized marijuana on July 1, 2018, will make it Cannabis Day as well as Canada Day.

But next month’s federal legislation amending the Criminal Code also means provincial laws need to be changed and a distribution system developed to ensure cannabis sales are restricted to adults.

It is an industry that a Deloitte report last fall estimates could be worth $22.6 billion annually, eclipsing the combined sales of beer, wine, and spirits.

The Ontario government now has bureaucrats from a dozen departments developing the province’s marijuana strategy, examining health, road safety, youth and justice issues as well as the fiscal implications.

Premier Kathleen Wynne has said regulating cannabis and limiting access for children and teenagers will be critical as Queen’s Park develops its own legislative framework.

Attorney General Yasir Naqvi said Monday the province is “looking at all policy options that will ensure that we have regulated use of cannabis in the province of Ontario.”

But Naqvi emphasized that the provincial government is awaiting the federal legislation — expected the week of April 10 — before determining how recreational weed will be sold in Ontario.

“That is going to give us the parameters under which we will be working. We haven’t made any decisions about what kind of distribution and retail model we will have,” Naqvi said.

The federal task force that studied legalization outlined its vision for distributing marijuana, noting that a well-functioning system “where the chain of custody is well-controlled” would be critical.

It recommended the wholesale distribution of cannabis be regulated by provinces and territories, noting that they already had “well-established and sophisticated” government-controlled sales networks that sold alcohol.

Free for all? Not likely

A free-for-all system in which anyone could sell marijuana is a non-starter with federal, provincial and municipal officials.

Even a system modelled on the U.S. state of Colorado, where regulated, privately owned recreational marijuana shops have been up and running since 2014, may be a tough sell in Ontario, which still has strict prohibitions on the sale of alcohol.

Although the federal task force heard support for storefront sales of marijuana, concerns were voiced about the “unchecked proliferation” of unregulated dispensaries.

Some provinces and territories and public health experts cited concerns that the private model could oversupply the market if outlets were allowed to open unchecked, according to the blue-ribbon panel led by former deputy prime minister Anne McLellan.

“This could lead to overconsumption and overuse by at-risk populations,” her task force found.

Wynne and Toronto Mayor John Tory have railed against the scores of illegal marijuana “dispensaries” that have opened in the city, exploiting what is still seen as a legal grey area.

Many have been raided by police with owners and staff charged and, in some cases, operators have not even reported armed robberies of their shops.

Ontario Finance Minister Charles Sousa signalled Tuesday that many of the pot shops will not be in business once the new regime takes shape after marijuana is legalized.

“They shouldn’t be there in the first place because they’re illegal,” Sousa said.

Liberal MP Bill Blair (Scarborough Southwest), the former Toronto police chief and Prime Minister Justin Trudeau’s point man on marijuana strategy, said cannabis regulation is analogous to tobacco control.

“Much of that evolved from great work that was done in cities and in towns bringing forward their own bylaws and regulations that controlled where tobacco could be consumed, and in many jurisdictions much of that has been incorporated into provincial regulation,” Blair said.

“I think municipalities have a role to play in this thing, and most certainly the provinces under the constitution have a significant say in what that retail environment can and should look like.”

A little government, a little private sector

Wynne has always said there should be some provincial involvement in marijuana distribution.

“It may not even be sold out of the LCBO. Because I’ve had people say to me we don’t want to have marijuana and alcohol sold out of the same places,” the premier told the Star last July, but the government agency could instead be involved in “regulation and distribution and monitoring it in some way.”

There was broad support for some form of retail store where marijuana users can engage with knowledgeable staff and the products before making their purchases, according to the federal task force.

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This model was cited as a way to ensure access and encourage competitive pricing which might help to limit the illegal market.

But there would have to be measures to control the density and location of retail stores to keep them away from schools, community centres and other public institutions.

Queen’s Park could mandate that the LCBO control distribution, with government-regulated marijuana — probably supplied by existing federally licensed medical cannabis producers — being sold through pharmacies such as Shoppers Drug Mart or Rexall.

This could dovetail with a mail-order business. Medical marijuana is currently available from licensed producers and delivered via registered mail by Canada Post.

The federal task force said this would be “especially important” to marijuana users in rural and remote communities would not have access to a retail storefront.

But there were concerns too that mail-order alone would not be able to handle demand for non-medical cannabis.

In the end, the task force said there were merits to both a government-run model and a private-enterprise model. “Either model could achieve the goals of protecting public health and safety, reducing the illicit market and controlling youth access,” it said, adding that the decision best rests with individual jurisdictions.

Government-owned pot shops

How does the Liquor and Cannabis Board of Ontario sound?

Wynne has left open the possibility of government-owned pot shops,

a model that has the backing of some public health experts who see it as an effective control on the supply of marijuana.

“Government-controlled outlets might be more likely to demand proof of age, refuse sales to underage or apparently impaired customers, sell only products supplied by licensed producers and comply with other federal regulatory limits,” the federal task force said.

However, McLellan’s panel cautioned against selling weed in the same location as alcohol or tobacco.

“Concerns were raised about product promotion and exposing a larger population to cannabis products should sales be co-located.”

NDP Leader Andrea Horwath noted Monday that the LCBO’s unionized employees have the training and know-how to keep under-aged users from buying marijuana.

“The big issue is the social responsibility piece so we know that the LCBO has that kind of capacity if you will — they have a distribution method that is already in place,” she said.

Blair, who once suggested LCBOs were the most reasonable place from which to control legal cannabis sales because of the ability to restrict youth access to the drug, now says he hasn’t abandoned such a model.

“I’m not advocating around any position,” Blair insisted, noting every province and territory except for Alberta currently has a regulatory framework and system of retail for alcohol sales.

“When you’re trying to explain to people how the retail environment could be regulated, I find it a really good example to point to that most people are familiar with,” he said.

“I think there are certain efficiencies and economies that might be realized by building upon what’s already in place as opposed to building a new infrastructure, but at the same time it’s not my intention to get out in front of the provinces and territories on this.”

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