As cannabis sales become legal in Canada, the country will move ahead of the U.S. in reaping the benefits.
On October 17, everything changes. That’s the day the manufacture, distribution, possession and use of cannabis in Canada becomes legal nationwide. But the repercussions will be felt here in the United States from Portal, North Dakota, to Brownsville, Texas, and from sea to shining sea.
We’re already seeing the impact. Last week, a Canadian company listed on the New York Stock Exchange legally sent cannabis products across the US border to be used for medical research. Products, keep in mind, that are illegal in the US at the federal level. It is just another example of how backwards we are about cannabis. Not only are US companies losing market share to foreign competitors, the public companies we do have are barred from the bigger exchanges. Remarkably, however, we are allowing Canadian firms on the granddaddy of them all, the NYSE.
The first impact of Canada’s big move will be financial. Recreational sales are projected to be as high as $6.5 billion by 2020, with the government collecting an excise tax of 10% or $1 per gram, whichever is higher. Each Canadian province also will collect a sales tax.
But we should expect other, more subtle changes that ultimately will impact how cannabis is manufactured and used — and further isolate the U.S. as it continues to classify cannabis in the same category as heroin and methamphetamine. In the meantime, here’s what to expect.
Research
As an illegal substance, cannabis is hard to come by, which has long stymied anyone interested in finding out more about the plant. (Hence the hoopla around Canopy Growth sending cannabis to the US.) But once cannabis is legal, Canadian scientists – unlike their American counterparts – will find it easy to buy or produce cannabis for research purposes. They’ll also be able to conduct clinical trials on humans to determine cannabis’ biological, sensory, clinical and societal effects. New research will bring a better understanding of the chemical attributes of particular strains, explaining why some induce yawns and others are energizing. More and better research also will allow us to produce cannabis that better meets specific medical needs.
Meanwhile, the U.S. will continue to fall behind, since our federal drug laws hinder research. Although the Drug Enforcement Administration since 2016 has received dozens of applications from scientists wanting to produce cannabis for research purposes, it’s only approved one institution, the University of Mississippi. And the DEA doesn’t appear eager to approve any others, despite the fact that the Pew Research Center says 61% of Americans support nationwide cannabis legalization.
Employers
Each of Canada’s 10 provinces will set up its own system to regulate the sale of cannabis. But nationwide, employers will have to consider how to deal with the plant’s change in status. Although recreational cannabis will no longer be illegal, employers may or may not allow it in the workplace. Experts predict most employers will expand existing alcohol policies to include cannabis, and generally prohibit any sort of impairment. Of course, there’s no consensus about what “impairment” means in regard to cannabis use, so that may be tricky. Employers also will have to examine existing policies to determine if they need updating. For example, consuming edibles will no longer be prohibited under a rule against “illegal drugs” at work. They’ll also have to decide whether to — or even if they can — apply any restrictions to employees who work remotely or from their own homes. Whatever they do, employers must design policies and procedures to ensure a safe work environment where employees want to work.
Opioid Use
Several studies have shown states with legal medical marijuana dispensaries have fewer opioid addicts and overdose deaths. In fact, a February 2018 study found opioid prescriptions fell significantly in states with medical cannabis laws. Patients with chronic pain said their opioid use decreased by more than 60% in those states. In the U.S. alone, the economic cost of the opioid epidemic is expected to reach $500 billion from 2018 to 2020. That doesn’t even count the personal cost to families and communities of lives lost to opioid addiction and overdose. Canada can expect to reap the benefits of those reductions across the board.
Retail experience
The retail experience will differ across the country, because each province is making its own rules. The Canadian government gave provinces the right to determine how cannabis can be sold, where stores may be located and how they must be operated.
Most provinces will allow online sales, but in some places they will be run by the government. Some provinces will allow private, for-profit dispensaries. Nova Scotia, instead, will allow cannabis sales only at stores now run by the Nova Scotia Liquor Corp., the sole distributor of alcohol in the province. Ontario, the most populous province, set up a monopoly called the Ontario Cannabis Retail Corp., to act as the only wholesale distributor of cannabis in the province. Canada has just 10 provinces. Fifty different sets of rules and regulations in the U.S. would be confusing and could inhibit development of the industry as companies struggled to meet the various qualifications in each state. Of course, that’s where we’re headed now, unless and until the federal government legalizes cannabis.
