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How Canada Plans to Roll Out its Recreational Pot Industry

With Canada planning to legalize marijuana on October 17 this year, its market will operate on a very different model than that used by the nine states that have legal laws in the United States already. There are several notable differences, and it will not resemble California weed delivery in any way. Some of these discrepancies include age limits, banking access, and government involvement, to name a few.

It will even be legal for Canadians to order weed online and receive it in the mail, an action that the United States still considers illegal. When Prime Minister Justin Trudeau announced that Canada would legalize recreational pot this year, celebrations were widespread. However, the country’s territories, provinces and cities are still figuring out how to roll out and regulate the industry.

This is what we know so far:

Government Will Run Pot Shops

Although provinces and territories can decide on their own how they want to regulate distribution, and they are considering a few different methods, it seems that many stores will be under complete control of the government. Ontario’s Liquor Control Board will run all 150 shops planned for that province, a public ownership model foreign to the U.S., except for North Bonneville’s single city-owned store.

British Columbia has plans to incorporate a mix of both private- and publically-owned shops. In Saskatchewan and Newfoundland, there will be only private stores. In remote regions, where it might be economically unfeasible to have stand-alone pot shops, such as in the Northwest Territories, currently operating liquor stores will start selling cannabis.

Age Limit Will Be 18

Most U.S. states that allow recreational use set their minimum age requirement at 21-years old. In Canada, the federal government will allow anyone 18-years or older to use marijuana, but most provinces are considering adding a year onto that, setting the minimum age requirement in most areas at 19-years old.

Home Growing Will Differ Between Provinces

As with the United States, or at least those states with liberal marijuana laws, rules for cultivating weed will be up to the individual provinces and territories to decide for themselves. Most plan to allow legal adults to cultivate up to four plants in the privacy of their homes, but others, such as Quebec, intend to prohibit home growing entirely.

Prices and Taxes Will Be Cheaper

Whether private entities run pot shops or the government does, all will have to get their stock exclusively from growers licensed by the federal government. Canadian officials also plan to set a minimum price for weed. The country’s finance ministers want to set it at around $10 a gram, but to displace illegal trade even further, Yukon’s pot authorities want to set it lower, at just $8.

The federal government intends taxing legal weed at either one-tenth of the price of the product or at $1 per gram, whichever is higher, as well as imposing both provincial and federal tax on all sales. Still, this is unlikely to be more than the exorbitant taxes states in the U.S. are demanding. Pot companies pay 37 percent tax to Washington State, plus local and state taxes on sales.

In California, licensed weed businesses are paying nearly half of their profits in taxes, leading folks to blame the near 50 percent total tax rates on driving prices up and sending customers back to the illegal, underground market. However, Canada’s government plans to give at least 75 percent of the tax monies it collects back to its territories and provinces.

Banking Will Not Be Illegal

Pot businesses will have something their counterparts in the United States do not have, and that is access to banking services. Since, under U.S. law, marijuana is still a federally illegal substance, most banks are hesitant to service the weed industry, even in states where it is legal. Last spring, according to data from the U.S. Treasury Department, only 411 weed companies had bank accounts nationwide.

However, none of them has access to full banking services, whether at banks or credit unions. This makes it extremely difficult for any marijuana businesses in the United States to qualify for loans. Although major banks in Canada were initially hesitant to offer banking services, the smaller, independent institutions have no issue with it and the big banks are now joining the fray.

Some Products Will Roll Out Slowly

There is frustration among some consumers that stores will not stock all pot products when sales go into effect on October 17, at least not initially. There certainly will be no edibles on the shelves for at least another year, since the government says that it needs the time to create regulations for an edible market.

Package Labeling Will Be Very Strict

Health Canada is mandating huge labels to warn consumers on packages that are otherwise completely plain. It is also regulating font colors, styles and sizes very strictly. The goal is to be as unappealing as possible to minors and to dissuade them from using weed. However, it leaves companies with very little options to create branding or logos.

The issue is that, without opportunities to differentiate themselves with branding or logos, craft growers and small businesses will be unable to compete with giant marijuana companies, who are already attempting to monopolize the industry by entering into exclusive supply agreements with provinces and territories. Although the law permits micro-producers, they have almost no chance to be competitive.

Mail Order Delivery Will Be Available to Consumers

Although in California weed delivery is very popular, drivers must deliver products themselves. Ordering pot by post is illegal in the United States. However, Canada has been doing it since 2013 already, shipping medical weed via mail to legitimate patients with no hassles at all. However, consumers will have to provide proof of age to get it, as packages will not go into mailboxes or lie on doorsteps.

 

Author Bio

Dorothy Watson writes extensively for Pot Valet, a leading cannabis delivery service in California. She dedicates her time to advocating for full legalization worldwide and educating people about the many health benefits that marijuana has to offer.

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