Pubdate: Sat, 15 Oct 2016
Source: National Post (Canada)
Copyright: 2016 Canwest Publishing Inc.
Author: Lori Culbert
Series: O Cannabis: Part One of Six.
Pages: A8-A9


Planning to go skiing this winter in Alberta's resort towns, or
perhaps some fall camping in rural British Columbia?

Be careful if you want to fire up a joint alongside the chairlift or

That's because police investigate more marijuana possession and
trafficking incidents per capita in parts of Western Canada, despite
the long-held belief that attitudes toward pot get mellower as you
near the Pacific Ocean.

Postmedia analyzed 12 years of national crime statistics to determine
where you had the highest odds of being questioned by police for
having a small amount of bud. Lake Louise and Jasper have consistently
been at the top of the list, and were followed in 2015 by several B.C.
mountainside towns, including Whistler, Merritt, Hope, and Salmo.

But go ahead and puff away if your travels take you to some parts of
Central and Eastern Canada, where police investigate fewer pot
possession cases. And that's not because no one partakes in the
eastern half of the country - the highest provincial rate of marijuana
use per resident is in Nova Scotia, while Alberta has the

So why should we care where in Canada law enforcement has been
targeting pot smokers, especially since the federal government plans
to make cannabis legal? Because, although marijuana offences have been
dropping for four years, they still represented nearly two-thirds of
all drug cases last year. More than half of the 96,000 drug offences
reported by Canadian police in 2015 were for marijuana possession,
while another nine per cent were for cannabis trafficking, production
and distribution.

How marijuana has been handled by police officers, prosecutors and
mayors over the last decade has been wildly inconsistent across
Canada, often differing dramatically between municipal and provincial

Now Prime Minister Justin Trudeau is grappling with legislation that
will not only legalize cannabis, but also attempt to homogenize how we
as a country think about weed - rolling together the
Just-Say-No-To-Drugs hardliners and police concerned about organized
crime groups with the recreational potheads and those who swear by
marijuana's medicinal benefits.

A federal and provincial task force will seek input from health, law
and substance abuse experts, with the goal of designing a sales and
distribution system that will be operating and collecting taxes by

But the new legislation is not scheduled to be introduced until next
spring, and it could be 2018 before it becomes law. So, what to do
with pot right now - when it is still technically illegal, but
everyone knows Ottawa plans to make it legit?

Canada's doctors raised concerns i n August that there is not yet
enough solid evidence that weed is a safe medical treatment. And in
Toronto, the health board has asked Trudeau for immediate
clarification on how to handle the possession and sale of pot during
this hazy period before legalization.

"We are told by the federal government that recreational pot will be
legal tomorrow, but we are (supposed) to continue to enforce that
failed criminalization model today," Toronto City Councillor Joe
Cressy said in an interview. "The challenge that city halls - in towns
and cities right cross the country - are facing is there is no
overarching public health framework to deal with this today."

Postmedia is launching a national, week-long series examining what is
in store for our future, when relaxing at the end of the day with a
toke on a joint could be as common as sipping a glass of wine.
Journalists in Ontario, Saskatchewan, Alberta and British Columbia
will look at the legal, medical and business ramifications of a
reefer-friendly nation, and the lessons learned from trail-blazing
states such as Washington and Colorado.

Finding consensus on the new laws from coast to coast to coast will be
a challenge.

In Lake Louise, nearly 40 out of every 1,000 residents were
investigated for possessing pot in 2015, while in Jasper the rate was
30 out of every 1,000. The two Alberta ski towns have been near or at
the top of this national list for almost a decade.

In contrast, of the 1,132 municipalities analyzed by Postmedia, more
than 35 had no marijuana possession investigations by police in 2015;
and in 300 towns, fewer than one person out of every 1,000 was
investigated. Those with a history of no or low bud offences include
Cape Breton; the Beresford area i n New Brunswick; Stratford, P. E.
I.; Kativik, Que.; and Kingston, Ont.

Vancouver has a relatively low charge rate for marijuana possession,
even though the pungent aroma often wafts through city streets. On
April 20, cannabis's counterculture holiday, a day-long pot party on
one of Vancouver's most beautiful beaches attracted tens of thousands
of light-headed celebrants toking, munching down cannabis cookies and
generally acting as though the drug was already legal.

Many Canadian cities have these technically illegal pot cafes on their
streets, places where those who are truly or fictitiously sick can buy
marijuana with a doctor's note. The communities' relationships with
these stores, however, vary greatly.

After dozens of the dispensaries spread like dandelions in Vancouver,
the mayor decided to ignore federal drug laws and offer some business

That same month, Toronto police closed 43 dispensaries and arrested 90

Right across the country, city halls are relying on police more than
lawyers to settle these disputes: dispensaries have been raided
recently in Edmonton, Saskatoon, Winnipeg, Niagara Falls, Moncton and
Halifax. And not all of B.C. is chill: RCMP shut down pot shops in
Chilliwack and Campbell River.

Cannabis smokers tend to prefer these stores to Ottawa's bureaucratic
mail-order system that requires users, with a doctor's note, to order
pot from one of 35 federally approved medicinal marijuana dealers.

Advocates won a victory in August when the Liberals introduced new
rules to again allow authorized patients to grow a "limited" amount of
marijuana for their own use, in response to a February court ruling
that said a decision by the previous Conservative government to force
people to buy their medicinal pot from Health Canada-licensed
producers violated their constitutional rights.

It is a nasty entanglement of rules that may be unravelled by
legalization. But do Canadians care if the country has unified,
national rules for marijuana?

According to StatsCan, nearly half of Canadians 15 years and older
have tried pot, although only 12 per cent used it in the past year.
Use was most common among 18 to 24 year olds. Cannabis is consumed
most often in Nova Scotia ( 16 per cent of the population), followed
closely by B.C., and is least used in Saskatchewan (10 per cent).

Policing cannabis has cost taxpayers big bucks - although the exact
amount is hard to pin down. In 2002, a Senate report put the annual
law enforcement and justice system costs at $300 million to $500 million.

More recently, the House of Commons justice committee was told this
past March that the federal government is spending close to $4 million
a year prosecuting those caught with small, personal stashes of the
drug. Tens of millions more is spent on police, jail and court costs.

- ---------------------------------------------------------


Growers of medical marijuana hope the addition of recreational weed
will offer a prescription for success.

Master horticulturalist Francoise Levesque tends to the thousands of
marijuana plants at Tilray, one of 35 federally licensed producers of
medicinal marijuana that have brought pot growing "from the basement
into the light."

"We are pioneering, in a way, how to do things," says Levesque, who
grew tomatoes before joining the Vancouver Island company. But
pioneering is rarely easy work. Tilray won a coveted licence in 2014
for the previous Conservative government's mail-order medical pot
system, but like many of the licensed producers, has since endured a
boom-and-bust cycle.

Encouraged by Ottawa to move quickly, Tilray invested $26 million in
its Nanaimo warehouse and had big expansion plans; a year later, it
laid off a third of its staff, in part because of foot dragging by the
Tories to greenlight the facilities and also due to the proliferation
of illegal dispensaries offering easier-toaccess retail sales. The
fledgling industry took another hit earlier this year when the Federal
Court struck down a Conservative law prohibiting medical patients from
growing their own pot.

Tilray president Brendan Kennedy is hoping the Liberal government's
intention to legalize recreational marijuana will be good news for the
industry - a scenario also predicted by industry watchers. He has an
interesting perspective, since Tilray's parent company is based in
Seattle, where retail stores have sold legal marijuana for two years.

"I see recreational legalization as a huge opportunity for the
industry," Kennedy said over the phone from Seattle. "In Washington
. they merged the medical program and the recreational program and
in some ways that is probably closest to what is happening in Canada."

Washington sells both kinds of pot from stores, which, Kennedy pointed
out, is "very different from the dispensary model in Canada."

Ottawa continues to deem storefront dispensaries illegal and unsafe.
The Liberal government has said it is studying the use of pharmacies
to distribute medicinal pot to patients, and is silent on how
recreational pot will be sold.

The clunky mail-order system has not been embraced by Canadians.
Health Canada's own study in 2011 determined 420,000 Canadians use pot
for medicinal reasons, and yet only 70,000 got doctors' notes and
registered to buy from the licensed producers. Sales have been
increasing, with nearly triple the amount of dried pot shipped to
clients in fiscal 2015 than in 2014.

But for more than a year, these facilities have been producing more
products than they have been able to sell, resulting in 11,000 kg of
dried pot collecting dust in warehouses as of March.

A potentially good seller for these producers may be cannabis oil - it
can be taken in pill form - which got the go-ahead from Health Canada
last year. Sales still lag dried pot, but the amount of oil these
companies produced increased seven-fold between December 2015 and March 

Of the 35 companies issued licences over the last two years, 20 are
based in Ontario and eight are in B.C.

Many stock watchers, including Cantech Letter, have identified a small
number of these companies as financial winners. According to
Bloomberg, the market capitalization (as of mid-September) of several
of these players is sizable:

❚ Canopy in Ontario, created by the 2015 merger of Tweed and
Bedrocan, is the granddaddy of them all, estimated to be worth $445

❚ The other big players, with evaluations well over $ 100
million, include Aphria in Ontario, Aurora in Alberta, Mettrum in
Ontario, and Organigram in New Brunswick.

Despite the competitive environment, more companies are entering the
field. To date, Health Canada has received 1,561 applications; of
those, 419 have advanced to a review stage - a long process with an
uncertain end.

Kirk Tousaw, a recognized legal expert on marijuana policies and an
advocate for modernizing cannabis laws, believes Ottawa's restrictive
rules have hobbled the 35 licensed producers.

"I don't think there is anyone in the industry who is profitable at
this juncture," said Tousaw, who has law offices in Vancouver and Victoria.

There is a role for licensed producers to sell recreational marijuana,
but existing illegal growers - who sell pot to many clients - should
not be excluded. "It cannot be an oligopoly," he argued.

Tousaw suggested the licensed-producer system needs to be more
accessible - mail order cannot be the only option, and dispensaries
are a "necessary component." Speaking to a federal government
committee on this topic, he made several recommendations, including:

* Ottawa should not disqualify people with cannabis convictions
from applying for licences - if people have expertise in growing pot,
there is a good chance they have had run-ins with the law;

* The costly, onerous security requirements at federally
licensed facilities must be reduced. "You don't need a bombproof vault
to store pot in ... or two years of security recordings."

* The government needs to more quickly process the applications
- - Colorado does this in 90 days - because many groups cannot
financially survive Canada's multi-year wait.

Tilray's Kennedy, however, argues that Canadians have not been
properly educated about the difference between bud grown in the
tightly regulated licensed facilities versus the uncertain safety and
criminal element tied to some weed sold under the table.

Tilray is a privately owned company, so it is hard to compare its
projected net worth to those with publicly held stocks. But Kennedy
says the company's future is not only focused on selling medicinal and
recreational pot to residents, but also participating in medical
research, such as a recent PTSD study with UBC, and exporting infamous
Canadian bud to other countries.

"We were the first company to do this legally," Kennedy said, adding
with a chuckle: "Certainly there has been lots of illegal exporting of
marijuana from Canada."
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