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Canada: The balance after cannabis legalization is sobering

2019-12-21T23:11:02.819Z


The Trudeau government focused on better protection of young people, traders on a booming business: In Canada, high hopes rested on cannabis legalization. So far, the balance has been sobering.



Justin Trudeau's satisfaction was evident. His cannabis legalization law passed the final hurdle in the Senate of Canada, and the head of government tweeted: "It was too easy for our children to get marijuana - and for criminals to make a profit. We're changing that today." That was in June 2018. Trudeau had kept a key promise on his progressive campaign agenda.

Since October 2018, adult Canadians have been able to buy and consume cannabis, even if it is not for medical purposes but for enjoyment. Cultivation and sale are also legal in several US states and are partially tolerated in countries such as the Netherlands. Canada, however, is the first leading industrial nation on earth to legalize cannabis - and the second country after Uruguay worldwide.

Chris Young / The Canadian Press via AP

Cannabis countdown: supporters celebrate upcoming legalization at a party in Toronto (mid-October 2018)

The approval process takes place in several phases: the sale of cannabis plants, oils and seeds was allowed immediately. For a few days now, Canadians have also been able to legally purchase cannabis-containing drinks and food.

But the Trudeau government is making slower progress than it had hoped for. This applies to the fight against crime as well as to efforts to keep young people away from the drug and from dealers who often also offer more dangerous substances.

In the third quarter of 2019, less than three in ten Canadian consumers obtained their cannabis exclusively from legal sources, as the Canadian statistics office reports. The rest continue to buy on the black market. Many of these buyers are likely to be minors.

AFP

A "Smoke Out" after cannabis legalization in Toronto: The hopes of the state have so far not been fulfilled

Expensive licenses, long waiting times, extensive security checks

The balance is also sobering for growers, traders and investors who expected a boom from legalization. According to the statistics agency, Canadians spent just 908 million Canadian dollars (equivalent to 620 million euros) in the first year since their release on the legal cannabis market.

For comparison, before legalization, the government estimated the total value of the black market at $ 8 billion. The market value of the country's six largest marijuana companies has halved since the "Cannabis Act" came into force.

Some experts draw parallels to the bursting of the dotcom bubble two decades ago: "It was a very painful year," said Eric Kirzner of the University of Toronto of the "New York Times". Marijuana is not the tech industry, but there was a lot of hype here and there.

Unlike their black market competitors, legal traders pay taxes. They also face significant bureaucratic hurdles. Sales licenses are expensive and their purchase involves long waiting times and extensive security checks. Some of the ten provinces that are responsible for the precise organization of the "Cannabis Act" completely ban private marijuana shops; elsewhere it is not allowed to grow hemp at home.

Ryan Remiorz / The Canadian Press via AP

Cannabis store in Montreal: Expensive bureaucracy

The result: There are currently just over 400 cannabis shops in all of Canada. Smaller retailers criticize that licensing is so expensive and time-consuming that large corporations are practically preferred.

All of this not only makes it difficult to meet demand with a legal supply and thus to combat the black market. Even with longstanding advocates of legalization, Trudeau is criticized for the slow implementation.

The government is betting on the time factor, because in the medium term the hopes associated with the release could still be fulfilled. The provincial government of British Columbia on the west coast of the country wants to double the number of legal cannabis shops and take action against illegal sales. The province of Ontario in the east wants to delete its current sales license cap. Finally, traders and investors rely on "Cannabis 2.0". The recently legally available drinks and groceries are supposed to bring about a change and finally the hoped-for boom.

But the revolution has not yet taken place. Fears that legalization could turn Canada into a stoner company have not been confirmed, according to the statistics office. Just under 5.2 million Canadians - or 17 percent of the total population - said they had used cannabis in recent years. Compared to the same period in the previous year, the value is unchanged, with one exception: there was a slight increase in the age group of over 65-year-olds.

Source: spiegel

All news articles on 2019-12-21

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