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Canadian Legalization: A Year in Review
Happy Anniversary! One year after lifting prohibition on recreational cannabis and we are overjoyed at the results. With this last year the cannabis industry has had some highs and lows, but overall the results have been positive. As of October 17, 2018 Canada lifted its prohibition on recreational cannabis for adults. Becoming the first G-7 nation to do so, and the only other nation, besides Uruguay, to take the leap.
This first year has been wrought with hardships for all facets of the industry. Retailers, licensed producers, law enforcement and recreational consumers have all been challenged to properly and safely navigate the new regulations.
Let’s take a look at the more memorable highs of the cannabis industry since last October.
In the first week of legalization, there were lineups around city blocks for the grand opening of local retailers. The excitement of the first day carried on for months and resulted in national shortages of legal cannabis.
In Alberta, every cannabis retailer was sold out and if you weren’t in line early enough, you were going home empty handed. The majority of consumers had to wait for their chance to sample their first legal green. Alberta has managed to overcome the cannabis shortages since then, and retailers continue to open new locations.
In the province of Saskatchewan however, there are still 16 of the original 51 retail applicants that haven’t opened their doors yet. They’ve been given a year and by October 17th 2019, they will have to forfeit their stakes if they haven’t become operational. The delay has primarily been attributed to the Saskatchewan Liquor and Gaming Authority’s (SLGA) screening process for applicants. They are still in the process of granting the permits.
These shortages and lack of locations have led to almost half of the consumers buying from black market sources. As the new legal dispensaries open up more and more black market sources were being shut down. Currently there are 223 licensed cannabis cultivators, processors and retailers in the country. 489 licensed retail locations have opened their doors with over 270 of them located in Alberta. Retail location numbers in the nation are expected to increase with Ontario approved to triple their number of locations.
The cannabis sector in Canada has skyrocketed. We are in the midst of a job boom. Including every facet of legal cannabis from cultivation, propagation, harvesting, processing, manufacturing, administration to marketing and retail, we have seen the numbers nearly quadruple from the 2018 fiscal year. Since 2017/2018, the numbers of companies and employees have continued to grow rapidly, reaching 175 companies and approximately 9,200 employees by April 2019.
Due to an excess of Cannabis related employment opportunities in the Country, some companies are seeking out-of-country workers to fill positions and keep up with their product quotas.
Job openings and postings from the cannabis industry, have more than tripled since July 2018. Online search engine terms like “cannabis” and “dispensary” have more than quadrupled.
Some Friendly Competition
In October of 2018, Alberta hosted “Hempfest Cannabis Cup”, the nation’s first legal cannabis competition, at the Hempfest Expo in Calgary. Hempfest takes place annually during October at Stampede Park. Cannabis Cup entries are open to all Canadian Citizens that can legally grow Cannabis, including Micro Cultivators, and home growers. In 2020, Hempfest events will also be held in Edmonton, AB and Saskatoon, SK as well.
Homegrown Now Legal in Quebec
The CAQ government’s ban on growing cannabis at home was ruled unconstitutional by Quebec Superior Court Justice: Manon Lavoie. According to Lavoie sections 5 and 10 of the Cannabis Act, present in Quebec law contradicted the federal law. Now, the Quebecois are entitled to produce personal cannabis quantities, equal to the rest of the Canadian provinces.
Leading Consumer Market
On the podium for cannabis sales are Alberta, Ontario, and Quebec in first, second and third place, respectively. Not only that, but as of June 2019 all three had sold more than twice that of the leading runner-up.
Albertans love to buy the Canna-goods, and the province has handled the first year exceptionally well considering the rough start across the nation. It’s predicted that Ontario may take the lead soon though, as the province now has another 50 locations expected to open soon. Retail sales are anticipated to drop slightly for Quebec now that the ban on home-growing has been lifted.
Economic growth of the cannabis industry has nearly doubled from the previous fiscal year, and the profits are significant. In fiscal 2018, the industry brought in a total of $2.5 billion while the 2019 fiscal hit a high of $4.2 billion. According to BNN Bloomberg the Canadian legal cannabis market is expected to reach $5.2 billion by 2024.
The Values of Safe Consumption.
It isn’t a surprise that Canadians are utilizing regulated legal cannabis, likely over many black market products. There is a peace of mind that comes with the quality control provided by regulation, (in addition to the convenience of budding retail stores.) 47% of Canadian consumers reported purchasing cannabis from the legal market as opposed to illegal sources. 76% of recreational consumers also reported they preferred the “quality and safety” of licensed retailers.
To address the question of morality in regards to cannabis culture, the federal government set the framework for legalization based around the public’s health and safety, with a major focus on keeping cannabis out of the hands of youth and children.
Cannabis and Academia
The boom in employment, the value of safety, and the start of new competitions have all led to the rise of cannabis education. There are programs opening up at various types of institutions including: Mount Royal University; and CannaReps: a private consulting company, who run Cannabis Sommelier courses.
Some companies are offering their own courses and training programs to better equip their new and future employees. This is a facet of the cannabis industry that may have been slightly overlooked. Though some criteria existed before, there are continuously more programs being created.
What’s Canada’s Next Step in Legalization
Cannabis Legalization 2.0
When Canada first passed the legislation for the Cannabis Act the government hadn’t fully explained the framework for regulations pertaining to edibles, oils and tinctures. In June of this year, the federal government announced amendments to the regulations setting out the rules governing the production and sale of legal edible cannabis, extracts and topicals. With the public health and safety in mind, the amendments will be structured to reduce any health risks associated with edibles and oil products.
Even though the new regulations will come into effect on October 17, 2019 (the anniversary of legalization) federal license holders will be required to provide 60 days’ notice to Health Canada of their intent to sell new products.
The introduction of edibles has the potential for leaps and bounds in the industry. According to Deloitte’s estimates the Canadian market for edibles and alternative products could reach 2.7 billion CAD annually.
With this new development, exponential growth of the Cannabis Industry is likely right about to begin.