The World is Watching Canada’s Path to Cannabis Legalization
Even though Uruguay became the first country in the world to nationally legalize cannabis for recreational use in 2013, their path to achieving full implementation has been what most would call bumpy and incremental (a generous characterization). At the time, the leftist government of José Mujica was introducing a number progressive reforms, and his cannabis reform legislation started out with 60 percent of Uruguayans in opposition.
Despite initial expectations to have a fully-functioning marketplace in place by the end of 2014, direct sales to consumers through pharmacies only came to fruition in 2017. Adoption has thus far been modest, with only 5,000 users registering (largely due to privacy concerns) to purchase cannabis from one of only two state-sanctioned brands being offered in sealed five-gram packets. In addition, prices are strictly controlled, greatly reducing the incentive for the small number of pharmacies authorized to sell these products. The available strains are similarly tepid, with a THC content of such low potency that the black market is still the go to option sought out by consumers seeking quality products (seizures by police are triple what they were before the law changed).
This is what makes Canada, the second country in the world, and the first in the G7 to legalize recreational cannabis, so intriguing for policy makers around globe.
Consider the following Canadian comparison to understand the vast differences between the two jurisdictions:
- In Canada, private sector producers that will number over one hundred by the time the change in law comes into effect (with further rapid expansion to continue until 2020)
- About 70 per cent of Canadians are in favour of legalization, 39 per cent of Canadians are expected to try cannabis after legalization, and the resulting demand is expected to exceed 1.2 million kilograms annually by 2020
- The current legislative bill that makes no mention of arbitrarily restricting THC levels
- The total anticipated economic impact (encompassing producers, manufacturers, security, lab testing, distribution and retail) is expected to exceed $22.6 billion annually
- Canada has presented a federal regulatory framework that will be differentiated across the country province to province, and municipality to municipality
- A mix of state-controlled and private sector retail options will be available to service the market
Needless to say, the Canadian model is truly what governments salivating at the potential for new sources of tax revenue, are going to use as their gauge on how to proceed.
In our next blogs, we will be talking about how Rubikon functions, the four ways that Rubikon has been tailored for the Canadian cannabis supply chain with expected global application in the coming years, and presenting further details on how this project will progress and proceed.
The Rubikon Team
