[ad_1]
On Wednesday, Canada will become the second and by far the largest country to legalize the sale of marijuana for recreational purposes.
Although the new rules of the North seem familiar in California, where the recreational cannabis market is legal and growing since January 1, they could accelerate Canada's already important role in the marijuana industry in California and the United States. United. Canada's burgeoning businesses are already buying marijuana projects in the United States and US pot companies have expanded after mobilizing investors on Canadian stock exchanges.
The start of marijuana sales in Canada also offers the first opportunity to study the impact of legalization on issues such as public health, crime, road safety and the black market in a large, wealthy country. .
Many policymakers will be waiting to see whether Canada will suffer the consequences of a violation of international treaties specifically prohibiting the legalization of marijuana. And if that does not happen, will other powerful nations, including the United States, follow their example?
"I think it's a trend we're going to see continue," said David Wood, a lawyer at Canadian law firm Borden Ladner Gervais and a member of the MAPLE Business Council, based in Tustin, which promotes opportunities between Canada and the South. California. "I think that legalized and regulated adult sales will be sold in other countries, certainly during the decade."
How did Canada get here
Canada and the United States – California in particular – have a similar story with respect to cannabis.
Hemp and marijuana for medical purposes were both widely used in Canada in the 19th century, until all cannabis was banned in the 1920s. In the 1960s, the counterculture movement provoked a surge in grass consumption and marijuana rights protests. And in 2001, five years after California became the first US state to legalize marijuana for medical purposes, Canada legalized the right of citizens with certain diseases to grow cannabis at home or at home. buy from a producer sanctioned by the government.
Three years ago, while current Canadian Prime Minister Justin Trudeau was on the campaign trail, he extolled a plan to legalize and regulate marijuana for recreational purposes. After his election, Trudeau quickly formed a working group to develop policy recommendations. A bill was published in 2017.
"Currently, young people have far too easy access to marijuana in Canada. Criminal organizations make billions of dollars in profits a year on the sale of marijuana, "Trudeau told Canadian Press in May. "We need to put in place a system that controls and regulates while protecting our children and our communities."
The Canadian Parliament overwhelmingly passed the cannabis bill in June, setting October 17, 2018 as the start date for legal sales.
A country has already led the way.
In 2013, Uruguay became the first country to legalize cannabis, which aimed to limit the country's flourishing and sometimes violent black market.
But the rollout has been slow, with sales only beginning in the summer of 2017. The market is also tightly controlled, with sales only allowed in licensed pharmacies and at prices set by the government. . Tourists in Uruguay are not allowed to buy marijuana.
Since legalization, Uruguayan pharmacies have been facing banking problems – similar to the obstacles faced by some Californian merchants – with US financial institutions threatening to close their accounts if they sold marijuana. In addition, Uruguay is a small country, with about the same number of people in the country as in Orange County alone and an economy that is a fraction of the size.
So even though it is clear that the sky did not fall to the water in Uruguay, the unique circumstances of this country have probably limited the effects of drive that the first national cannabis market could have to have on the rest of the world.
"As far as Uruguay is concerned, they just do not have the influence and the international community that a G7 country like Canada," said Harrison Phillips, vice president from Viridian Capital Advisors, a New York-based financial advisory firm focused on cannabis. industry.
That's why so many people are now turning to our northern neighbor.
What will Canadian legalization look like
While Canada is about 23 times larger than California geographically, the two regions have similar populations, with 37 million inhabitants in Canada versus about 40 million in California. Cannabis markets are also about the same size, with New Frontier Data each forecasting about $ 6.8 billion in 2019.
As in California, Canada will regulate marijuana in the same way as its rules on alcohol. All legal marijuana will be followed by the seed for sale. Quantity limits will be slightly less stringent in Canada (a person may own up to 30 grams in Canada versus 28.5 grams in California), while limits on the number of plants that residents can grow at home (four against six) will be stricter. And Canadian weeds will be sold in quieter packaging, with no colorful graphics or authorized branding.
In addition, Canadian provinces will decide to host cannabis retailers, creating a mosaic of local marijuana policies, similar to California, where cities and counties can approve or ban marijuana. cannabis related businesses.
And, like California, the new marijuana rules in Canada provide for at least some chaos. Canada's most populous province, Ontario, will not allow sales to begin Wednesday; Los Angeles was not ready for legal sales when the California market was launched on January 1st.
Nevertheless, more than 100 marijuana stores are expected to open in Canada on the first day of sales, in other mail-order-based industries, according to a recent poll by the Associated Press. Some provinces, such as Alberta, allow privately managed stores. Others, including Quebec, will only allow government-run stores.
Canadian jurisdictions may also make rules about where residents may use marijuana. Many only allow it in private homes, in accordance with California law. But the province of Alberta will allow adults to smoke cannabis wherever tobacco is allowed as long as the neighborhood is not attended by children.
Another major break with California's policy is that, for the time being, Canada will only allow sales of flowers, oil, capsules, plants and cannabis seeds. Edibles and concentrates – which, when combined, account for about half of the California retail market – can not legally be sold in Canada for some time in 2019.
But other differences with the Canadian market could attract visitors to the United States, who will simply need ID to buy legal cannabis.
For example, Canadian buyers will only have 18 or 19 years (depending on the province) to buy marijuana, while all states in the United States have a minimum age of 21.
Canada will tax all marijuana sales at 10%, or $ 1 Canadian per gram, whichever is greater. This is less than the 15% excise tax imposed by California, although the provinces of the region (as in cities and counties here) can use their own sales taxes.
Consumers should note that while California is reducing or eliminating penalties for almost all marijuana-related crimes, Canada imposes strict penalties on those who violate its cannabis laws. For example, anyone who provides grass to minors can be sentenced to a prison term of up to 14 years.
Canada is not under the same pressure as California and other US states to help balance criminal justice issues, such as prison overcrowding, with marijuana legislation, according to LuAnne Morrow, an attorney based in the United States. Los Angeles. She explained that this is why the Canadian government felt "comfortable enough" to stick to the severe penalties imposed on the behaviors they wanted to discourage.
Travelers should also keep in mind that they still can not carry marijuana across the border, even if they enter or leave a state like Washington or Alaska where marijuana is also legal.
Earlier this year, US Customs and Border Protection put a loop on travelers, indicating that anyone involved in the cannabis trade in Canada would not be allowed to enter the United States.
US customs authorities said this month, however, that Canadian citizens "would generally qualify," provided they do not come to the United States for marijuana-related cases.
"I think it has been a big relief for a lot of people here," Morrow said.
Impacts already felt
It is unclear how other countries will respond to Canada's break with the international drug treaties.
Wood said he would not be surprised if some countries with particularly punitive drug laws give up. This could have repercussions on trade negotiations and other diplomatic relations. It could also affect the treatment of Canadian visitors to these countries, with stricter requirements for visas or customs security checks.
But experts said they did not expect resistance from Canada, given the cautious way in which it is setting up a regulated cannabis market.
"As long as it does not go bad, I do not really see the international community cracking down," said Phillips. "I think we give them some sort of pass to try, but I think they'll be closely watched."
Some effects of Canada's future legalization are already being felt in California.
As cannabis remains illegal in most of the United States, the California market is limited by roadblocks that Canada will not face. California companies can not cancel traditional spending under the US federal tax code, for example. They can not legally ship marijuana by mail, fly with him or cross the border, even to a neighboring state where marijuana is legal. And they can not access major banking or credit services, which limits their ability to leverage the capital that has helped Canadian companies, such as Canopy Growth and Aurora Cannabis, get multi-billion dollar valuations.
That's why a number of American marijuana companies are opting for advertising in Canada.
"The business environment has become a lot more supportive," said Phillips.
Some Canadian stock exchanges have blocked US cannabis companies, citing conflicts with US federal law. But the Canadian Stock Exchange has welcomed the industry with about 150 marijuana shares now listed on the third exchange.
One of these companies is MedMen, a Culver City-based dispensary giant who traded $ 5.71 a share a share on both the Canadian and US over-the-counter markets. That was a 28% jump from Thursday when the news was revealed that MedMen had doubled its reach in the market using recently-found financing to buy PharmaCann for $ 682 million – which would likely be the largest acquisition of cannabis in the history of the United States.
More US companies are expected to do the same and the Denver-based food company, Dixie Brands, is about to become public in Canada before the end of the year.
The federal illegality of cannabis in the United States also kept American business valuations at a low level. This would encourage Canadian companies to take over US operations before the federal laws are relaxed – from the opening of banking services to the full legalization of cannabis for recreational purposes – could drive up values.
Toronto-based Captor Capital Corp., for example, has MedMen-managed cannabis stores in Santa Ana and West Hollywood. And the firm recently bought another store in Santa Cruz for $ 6 million.
Canadian-controlled firms still represent a small percentage of the US market – less than 5%, according to Phillips' estimate. But new cross-border agreements continue to be made in the context of Canada's Legalization Day.
"The United States has 10 times the demand for products from Canada," said Phillips. "A lot of Canadian companies know that the United States is the final game."
