Pubdate: Thu, 25 Feb 2016
Source: Globe and Mail (Canada)
Copyright: 2016 The Globe and Mail Company
Author: Sylvain Charlebois
Note: Professor at the Food Institute, University of Guelph
Page: B4


Medicinal marijuana is going mainstream - or, at least, it may become 
available at many retail outlets. Two major drug chains, Shoppers 
Drug Mart and Rexall, have reportedly explored retail distribution of 
medical marijuana in recent months. For Shoppers, the reported aim is 
to sell several brands, perhaps even under its own private labels.

Imagine: Canadians could soon be purchasing President's Choice pot. 
This may sound like a far-fetched idea, but considering how quickly 
our marijuana landscape is moving, such a scenario is conceivable.

Both retailers unmistakably see the potential in making such a pre- 
emptive move on selling medical marijuana. Similar to energy drinks a 
few years ago, marijuana could significantly bolster top-line results 
for the next decade or so. The medicinal market would undoubtedly be 
a smart gateway into the potentially lucrative recreational market. 
With a pot-friendly government in Ottawa, the prospects of seeing 
recreational marijuana legalized in Canada is real.

Colorado, which legalized the sale of recreational marijuana a few 
years ago, saw its retail sales of the product reach almost $ 1- 
billion ( U. S.) in 2015. Most importantly, retail sales generated 
more than $ 135- million in new tax revenue for the state and many 
analysts expect that number to quadruple soon. Colorado is 
essentially getting a piece of what used to be an underground 
economy. Washington State is seeing similar results.

 From a business perspective, marijuana sales also have obvious 
drawbacks. For one, brand equity could be affected by selling what 
many consumers still perceive as a forbidden product. Loblaw Cos., 
which owns Shoppers Drug Mart and carries the valuable President's 
Choice brand, has likely concluded that benefits outweigh such 
downsides, but while society may have become more liberal in its 
views, the stakes are very high for these companies. Perhaps, once 
Health Canada's blessings are given, our collective perception will 
forever change, as appears it to be happening in the United States.

Given the product is marijuana, traceability will be key in moving 
forward. Assurances the product can be traced from seed to sale is 
critical for product quality and the integrity of the system. As 
marijuana takes a larger place in the legitimate economy, more 
technologies will be developed to increase production efficiencies 
and quality testing. Access to steady supply, helping retailers set 
reasonable price points, is also key.

Canada's regulatory scheme is a long way from ready to support retail 
marijuana sales. Public education and awareness would be key, but the 
issue of taxation also requires deliberation. If Ottawa is going to 
tax medicinal marijuana, as some U. S. states are doing, it should be 
clear on its underlying intent. The government needs to think clearly 
about how it will proceed with recreational marijuana now and in 
future. Revenue could be directed to fund research that would gauge 
the impacts of cultivation and use, local law enforcement capacity, 
neighbourhood-improvement programs and treatment programs. When 
giving society access to vices, the moral state can never be too far 
away. Government should mitigate against probable undesirable 
societal afflictions, as the provinces have done with gambling.

The most critical aspect to allowing marijuana to run more freely 
across supply chains is international commerce. The United States has 
expressed its concerns about Canada's intention of making marijuana 
more readily available to consumers. Even if some states have moved 
ahead with the legal distribution of marijuana, many states remain 
opposed. Canada must maintain a good relationship with the United 
States - the last thing we need is a trade dispute spawned by the 
availability of medicinal marijuana.

Our collective wisdom would likely suggest we might not be there yet 
as a society. But both Shoppers and Rexall are pursuing what both 
companies have done so well for decades: selling drugs to Canadians 
responsibly. These companies adhere to a professional code of 
conduct. Considering the qualified knowledge and that the 
infrastructure is already available, going with privately owned drug 
chains only makes sense.

In Ontario, some have suggested a Crown corporation should be the 
preferred choice. The idea of granting the Liquor Control Board of 
Ontario a licence to distribute marijuana is inappropriate. The 
provincial Crown corporation does not have the professional expertise 
to sell drugs, nor does it have the capacity or know-how to properly 
trace and track such products for quality assurance.

Still, one has to admit that the idea of buying marijuana while 
earning Air Miles reward points would have been interesting.
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MAP posted-by: Jay Bergstrom