5 Surprising Truths About Canadian Legalization
The country's legalization of cannabis was a big step forward, but they still have a long way to go.
Cannabis legalization is poised to have a huge, positive impact on Canadian society -- now that the simple and commonplace act of lighting a joint or consuming a soft gel capsule is no longer considered a crime. Not only will Canadian citizens benefit, but investors and entrepreneurs will also be faced with a massive and rare opportunity.
The excitement and interest surrounding what's happening in Canada inspired our company to recently open offices in both Toronto and Vancouver. As we’ve navigated our way through that process and the country's unique legal landscape, we've learned a few things. Here are five of my most important takeaways for my fellow U.S.-based cannabis entrepreneurs who are setting their sights on the Canadian market.
1. Canada is legalizing cannabis with a prohibitionist mentality.
Canada has come a long way, but it has much further to go. Unfortunately, there is still evidence of a prohibitionist mindset at play.
The long road to legalization began with patient advocates and lawyers fighting for patient access. They achieved this by dragging the previous, resistant government through many legal battles. Ultimately, they won and secured a thriving medical program in Canada.
Fast forward to today. Adult recreational users can now also enjoy the benefits of cannabis (albeit with a government mandate to keep cannabis out of the hands of the youth and criminals). But not everyone is on board. I’d like to see the Canadian government doing much more to recognize and promote the tremendous therapeutic, environmental and economic potential benefit of cannabis.
There is an opportunity for businesses to take the lead here by seeking ways to educate lawmakers, medical workers, retail distributors and consumers. They can begin by connecting these audiences with the doctors and other experts who helped push the country past prohibition. Businesses can create compelling content and physical experiences that educate and entertain. My own experiences with my company in the U.S. have demonstrated the power of authentic content -- which is not at all like advertising -- combined with, say, physical education centers that offer learning experiences about cannabis companies, products and benefits.
2. Only two types of cannabis products are being legalized this year.
As of October 17, Canadians are able to enjoy two types of products that are legally available: 1. Whole flower cannabis, and 2. Edible oils, including Softgel capsules. Looking forward, the Canadian government is developing a regulatory framework for finished edible products, vape pens, hash and inhaled concentrates. But anyone seeking to enter the Canadian market and wanting to capture the buzz and excitement in the fall must understand that it will be at least a year before the full range of cannabis products are included in the regulated market.
3. Each province has a different retail model.
Now the Cannabis Act has come into effect, Canada’s 13 provinces and territories each have the authority to determine what distribution and retail will look like in their jurisdictions. This means each province can set their own rules about how cannabis can be sold, where stores may be located, and how the stores must be operated.
Given the regional autonomy, we will see a mix of slightly different models comprised of government-run online and private retail. What’s more, the provinces and territories have the option to create other restrictions, which include the lowering of possession limits, increasing the minimum age, restrictions on where cannabis may be used in public, and added requirements on personal cultivation. Any entrepreneurs creating a Canadian business plan need to understand that it will be impossible to create a one-size-fits-all approach; their plans must consider the patchwork system of rules that make up the Canadian model.
4. The medical marijuana system will continue to exist.
There are 300,000 Canadian patients accessing medical cannabis through their medical system. The Canadian Medical Association lobbied to end the medical system arguing that patients should access cannabis through recreational retail outlets, but the Government consulted with and listened to patients and concluded that the medical system will continue, encouraging patients to use cannabis with the knowledge and support of their healthcare professionals.
For digital entrepreneurs, marketing to cannabis consumers with educational programs will be financially rewarding if they focus on building credible lead-generation offerings around new patient acquisition.
5. Canada has highly restrictive branding, advertising and marketing regulations.
Canada has put in place highly-restrictive regulations around packaging, branding and marketing. This has resulted in plain packaging with large health warnings and no promotion of cannabis accessories or services related to cannabis. A regulatory environment such as this requires innovation and creativity. Tried and tired marketing strategies will simply not fly. Cannabis companies will have to lean on education initiatives, corporate social responsibility and meaningful community engagement to build brand recognition.
5.5 Bonus Tip
For my fellow cannabis entrepreneurs living on the other side of the border, you should know that the sale and consumption of weed is still a federal crime in the U.S. and Canadians who admit to smoking it or working in the marijuana industry can be turned away from the border or even banned for life. Although there has been some recent progress with this, the fact remains that the U.S. is not making it easy for anyone to conduct cross-border business even if you don’t touch the plant.
I’ll leave the final word to my friend and fellow advocate leading the charge in Canada, Hilary Black, Director, Patient Education and Advocacy at the Canopy Growth Corporation: "While this feels like legalization 1.0 and there is more work to be done in Canada, this is a momentous occasion to celebrate. This is a victory for human rights, social justice and patients rights. I am so proud of Canada for showing meaningful courageous leadership on the global stage."