Ontario reveals rigid government-run framework for provincial cannabis distribution

Provincial government will have a monopoly on cannabis retail sales

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      This morning, the Liberal government of Ontario was the first to unveil a provincial framework for cannabis distribution. 

      Attorney General Yasir Naqvi, Finance Minister Charles Sousa and Health Minister Eric Hoskins revealed the provincial government's plan and announced the creation of a separate cannabis control board that will be modeled after the Liquor Control Board of Ontario (LCBO).

      It will oversee the legal retail sale of cannabis through 150 standalone government-operated storefronts, which will be open by 2020. An estimated 40 shops will be ready by Prime Minister Justin Trudeau's proposed legalization date of July 1, 2018, with another 40 ready by July 2019. 

      (Comparatively, there are currently more than 650 retail liquor stores, and an additional 210 grocery and convenience stores licensed to sell alcohol on Ontario. There are close to 100 operational dispensaries in Vancouver alone.)

      The locations of the shops, where cannabis will be sold behind the counter and products won't be visible to customers, have not yet been determined as consultations with municipalities have yet to occur. 

      Based on observations of cannabis frameworks in Colorado and Washington, Souza told the media that it's "better to start with strong controls and evaluate the system over time."

      The board will also facilitate an online ordering service that will provide province-wide access to cannabis. 

      The minimum age for cannabis consumption in the province has been set at 19, the same as Ontario's age for alcohol.

      Those who use cannabis recreationally will be limited to consuming it in private residences, although when asked, Naqvi did tell the media there may be room in the future to allow consumption in restaurants and bars. He called the restrictive approach, "the common sense thing to do."

      If an underage person is found to be using cannabis in a public space, police officers will have the power to confiscate it.

      As many have expected given the sporadic raids in Toronto, the ministers made it clear that illicit dispensaries will be shut down in preparation for the provincial framework, and shut out of any possibility for inclusion in the retail market. The province said it will work with police and municipalities to ensure dispensaries cease operation.

      "If you operate one of these illegal facilities, consider yourself on notice," Naqvi said.

      Without dispensaries, consumers will only be able to purchase cannabis from the government-run stores, which will be supplied by licensed producers (LPs). Currently, LPs in Canada are only permitted to produce dried flowers and oils. Though edibles and a wide variety of other products are currently available at dispensaries, the federal government has said edibles won't be regulated for a few years.

      Many have already called out the government of Ontario for implementing a framework that is too strict. 

      "Ontarians have already made it clear that they don't want government run stores controlling the sale of legal cannabis," said David Clement, North American Affairs Manager of the Consumer Choice Center, in a statement.

      "The move to create a cannabis control board will simply replicate the existing issues we see with the LCBO and alcohol. The province should embrace private retail and the wants of consumers."

      Clement isn't wrong about consumers: A Nanos research poll released in July 2017 revealed that more than half of Ontario residents support the sale of cannabis by licensed and regulated private retailers instead of the LCBO. 

      Among local takes, Victoria-based lawyer Kirk Tousaw called the framework "misguided".

      Island-based industry consultants Eric Nash and Wendy Little tweeted about the continuation of the black market if there aren't enough retail shops throughout the province.

      Vancouver cannabis activist and dispensary operator Dana Larsen said Ontario's framework proves that prohibition isn't over in Canada.

      But none were as vocally opposed to the program as Jodie Emery, who attended the conference and called out the government for monopolizing the industry.

      Scott Leatherdale, an associate professor at the University of Waterloo’s school of public health, said he didn’t understand why the government wanted to build another stand-alone entity for cannabis sales to the public.

      “We already have an established model that the government runs for distributing liquor, and I’m not sure why we didn’t just take advantage of that,” he said.

      He also argued that if Ontarians aren’t provided with enough stores, “consumers will find other mechanisms for purchasing cannabis.”

      “You’re then criminalizing a behavior again, which should be seen as legal behavior within this new [federal] framework,” he said.

      On the plus side, Leatherman said he and other associates at the University of Waterloo have been running the world’s longest youth-focused longitudinal study on cannabis, and are excited to be able to put it to use.

      “Regardless of what happens with how [different provincial governments] decide to distribute it, we can evaluate the way it affects kids in Canada,” he said.

      With data from across the country, he’ll be able to compare the efficacy of one province’s program to another, with respect to youth.

      If the frameworks don’t have the desired impact, Leatherdale says he and his team will have evidence to present to the government.

      “Moving forward, we can hold them to task,” he said.

      “If it doesn’t work, we can show them.”