Legalization Blues: The Problem With Canada’s Roll-Out

Cannabis legalization has been an incredible milestone, something that many believed would never happen, let alone in our lifetime. And yet here it is. Finally, you can walk down the street to a convenient government-approved retailer and take your pick from an extensive selection of high-quality cannabis products . . . Only not all of that sentence is true, and those parts that are greatly depend on where you live in the country.

The fact is that while legalization is certainly a step in the right direction, we took that step with a bit of a stumble. Roughly a month and a half after the big day, the legal cannabis market is fraught with issues ranging from supply to quality to accessibility and we don’t seem to be making any progress toward recovery. On top of this, the simplest solution has been right in front of us all along . . .

SUPPLY & DEMAND

“Closed due to product shortages. Will reopen once shipments arrive.”

That’s what customers read on a sign posted in the window of The Cannabis Co., Regina’s only legal store on November 20th, a mere ten days after opening.¹ Now, there’s a couple of things wrong with this story: first off, a major city with a population of 215, 105 people did not have a legal cannabis store at all until over a month after legalization; second, it didn’t have nearly enough cannabis to fulfill the demand once it finally opened.

Unfortunately, this is not an isolated incident. There have been supply problems across the country that have been impeding legal customers from accessing their newly legal product. In another frustrated example, on October 30th—thirteen days after legalization—Prince Edward Island’s only licensed producer of cannabis products had half of their product sitting on warehouse shelves awaiting proper packaging. Packaging! When interviewed by the CBC, FIGR East’s President and CEO suggested that restrictive packaging requirements were at least partially to blame, though he laid the worst of it on third-party package suppliers.²

In Alberta, the situation has gotten so grim that major retailers are forced to scramble for inventory when and if it becomes available. National Access Cannabis Corp., the country’s largest private cannabis retailer, has employed a team of five people to work around the clock and snap up product the moment it’s made available.³ What’s worse, this shortage has had cascading repercussions, including the government of Alberta halting the distribution of new retail licenses because there’s nothing to sell.

Where are these delays coming from? Fingers have been pointing everywhere in the past month and half, but most of them fall on the government. Licensed producers complain that the government took too long to issue licenses, and others allege that Health Canada’s requirements are extremely restrictive, so much so that it takes producers over a year of trial and error to create a product that meets them. And the prognosis doesn’t look good . . . some experts believe that supply shortages may persist into 2020.⁴

QUALITY CONTROL

Earlier this week, British Columbia issued its first ever recreational cannabis product recall. A number of customer complaints had come in concerning a batch of cannabis produced by Redecan Pharm, a product also sold by the Ontario Cannabis Store. Angry customers took to Reddit to complain about mouldy product and some alleged that they had even found insects crawling on their bud.⁵ The company denied any knowledge of how such a corruption may have occurred, and drew attention to their rigorous screening process performed by a third-party company before packaging and shipment. Regardless of how it happened, this incident points to yet another flaw in the production system: quality.

“I have been buying weed from [black market] dealers for twenty years, and I’ve never paid over ten dollars a gram for something like this,” says David Kachinski, a longtime advocate for cannabis legalization who lives in Banff. He’s referring to a bag of Cali Mist that he had purchased from a licensed recreational retailer in Calgary. “Smell it,” he says. It doesn’t smell like very good flower. “Where’s the skunk? The earthiness? The sweetness? Anything? It smells like a dead leaf.” And he’s right.

Kachinski isn’t alone—his opinions are shared by people across the country who find themselves disappointed with the product of large-scale licensed producers. Smell is a big tell, an attribute that has long been appreciated by cannabis connoisseurs, and they now find themselves thoroughly underwhelmed with expensive product that doesn’t look good, doesn’t make them feel as good, and smells like nothing or, in some cases, hay.

EXPERTS ON THE SIDELINES

So we don’t have enough cannabis getting to retailers, and what we do have is not meeting expectations in terms of quality . . . Hmm. If only there were some experts with the ability, the knowledge, and the skills to supplement national inventory, or at least advise licensed retailers . . .

Of course, there already are. It’s no secret that the majority of the Canadian population was smoking pot prior to October 17th, 2018, and they got their product from existing retailers. Not just sketchy guys in dark alleyways either—professional retailers who worked out in the open, in the so-called “grey market,” to provide a product that they believed was justifiably good and right. And these companies and individuals with stock and experience to essentially bail out (or at least temporarily relieve pressure on) licensed producers and retailers have so far been shut out of the game they’ve been playing for decades.

It’s mind-boggling to consider that since October 17th, cannabis has become more difficult to acquire in Vancouver, a city championed as the country’s cannabis capital and which already had dozens of storefronts open! Existing grey market retailers have been forced to close while retail license applications are pending. These are retailers who in some cases have their own producers capable of delivering product to carry the market through this drought, and yet they are forced to sit on it.

Moreover, by cutting out small vendors and producers, we’re missing out on plenty of experimentation and variety that would make for a healthier, more active market. Just like craft brewers are able to take more chances and be more creative with their product than huge breweries who by virtue of the volume they produce need to please a wide market, small producers and vendors could combine their efforts to push the boundaries of cannabis products. The result of more producers and vendors, even small ones, would inevitably mean higher standards of quality brought about through healthy competition and experimentation.

LEGALIZATION BLUES

For now, we’ll need to hope and wait for legislators to see the light. Licensed retailers don’t have enough product to meet demand, and it’s not that good. There are plenty of eligible experts standing on the sidelines, shut out of their own game. It’s understandable to be down with a case of the legalization blues.

Perhaps our government should take a page from some American states which have been integrating existing grey market producers and vendors into the fold, creating a smoother market than our own. Surely much of our system’s current shortcomings are just growing pains, which will inevitably sort themselves out in the coming months and years . . . Hopefully.

Anyway, here’s to hoping, because for now it seems like we’ve been delivered a shoddy dream, one which may be hurting those who had dreamed it most fervently. Let’s remember that these issues with quality and supply are not only affecting recreational customers, but also people who need cannabis for medical purposes. With the current state of affairs, it’s no surprise that many consumers have been remaining with or returning to their grey market suppliers—many of whom are staying open at great personal risk because they feel that what they are doing is right. The government should perhaps consider an old adage, and if they can’t beat ‘em, join ‘em.

¹ https://www.cbc.ca/news/canada/saskatchewan/regina-s-only-legal-pot-shop-temporarily-closed-out-of-product-1.4914236
² https://www.cbc.ca/news/canada/prince-edward-island/pei-pot-supplier-packaging-problems-1.4883987
³ https://business.financialpost.com/cannabis/pot-retailer-watches-24-7-to-scoop-up-scarce-canadian-supply
⁴ https://globalnews.ca/news/4662574/legal-marijuana-canada-shortage-cannabis-producers/
⁵ https://globalnews.ca/news/4713509/pot-recall-bc-cannabis-stores/