Pubdate: Fri, 17 Nov 2017
Source: Ottawa Citizen (CN ON)
Copyright: 2017 Postmedia Network Inc.
Author: Philip Authier
Page: A5


Liberal government to sell pot through SAQ subsidiary stores, price
not set yet

Forced into the pot business by the federal government, the province
of Quebec tabled a law Thursday that imposes a strict framework for
the consumption, sale and distribution of marijuana.

Bill 157 - an act to constitute the Societe quebecoise du cannabis, or
SQC - was formally presented in the legislature by the minister for
rehabilitation, youth protection, public health and healthy living,
Lucie Charlebois.

As expected after almost a year of testing the water with the public,
Quebec has opted for a focus on averting potential social, health and
safety problems that it fears could follow the liberalization of the
use of the drug for recreational purposes.

The bill thus stipulates there will be zero tolerance when it comes to
motorists who decide to hit the road after lighting up or vaping
marijuana. A monopoly will run bland, austere sales outlets staffed by
prim and proper bureaucrats. And lots of money ($25 million a year for
the next five) will be spent on prevention and research.

Despite the federal government's vision of how things could work,
Quebecers won't be allowed to grow plants at home for personal
consumption or light up just anywhere. The maximum the SQC will be
able to sell to anyone at one time is 30 grams and people will have to
be 18 to make the purchase in stores or online.

An initial 15 stores are to be open by July 1, 2018, the day
possession and consumption of marijuana is supposed to become legal in
Canada. In two years, there will be 150 sales outlets, which will be
allowed to sell dried and fresh cannabis, cannabis oil and pot

The expression used by Charlebois at a news conference to explain the
bill was "responsible consumption."

Her colleague, Finance Minister Carlos Leitao, was blunt, calling
marijuana a "dangerous substance" that has only profited organized
crime for years. Studies show the main buyers remain youth, age 18 to
22, despite research concluding marijuana can affect the development
of the brain.

In fact, it has been very clear Quebec would rather not get involved
with the pot business, with senior Couillard government ministers
conceding nobody knows how this story will end.

"Do I like drugs? No," Charlebois said. "Do we need to act? Yes.
Unfortunately they are a reality we have to deal with and which we
cannot ignore."

"Frankly, we've tried the repressive model for the last 30 years, and
obviously it has not worked," Leitao added.

Charlebois insisted Quebec is not interested in expanding the
consumption of cannabis or using sales to generate money for the
government. The plan is to get people to buy it lawfully and under
government supervision.

The bill did not include a sales price. The omission was deliberate,
Leitao told the news conference, because Ottawa and the provinces have
yet to agree on the level of excise taxes to impose on cannabis sales,
which will affect the final retail price.

Ottawa recently estimated cannabis sales could generate about $1
billion a year in tax revenue for the whole country. The provinces say
most of that should come to them because of the costs of implementing
the policy, a federal Liberal election promise.

However, at a technical briefing after the bill was tabled, it was
clear the financial side of the business is being examined by the
government, with bureaucrats explaining the objective is to establish
a price that will woo buyers off the black market and into the legal

They cited expert testimony at hearings into the plan a few months
ago, and said the ideal price range would be $7 to $10 a gram.

Quebec believes about 140 tonnes of marijuana are on the market in any
given year.

The objective is to seize control of half of that, which would
represent about $500 million in sales for the SQC, which will be a
subsidiary of the Societe des alcools, a Crown corporation, officials

Based on those figures, Quebec estimates it could earn $30 million to
$40 million a year in excise tax revenues off sales and another $60
million in provincial sales tax.

Leitao, however, later urged caution. With so much uncertainty on how
high Quebec's cannabis business will fly, he said, he could not
endorse the figures.

Officials predict a temporary increase in consumption because of the
novelty factor: Customers who might not want to be seen walking into a
pot store will be able to purchase it online and have it delivered to
their door by Canada Post.

There are no plans to advertise the product and, unlike the SAQ, there
will be no in-store promotions or a client loyalty card modelled after
the SAQ's "inspire" card.

Ottawa has assured the province the necessary equipment to test for
drug levels in motorists will be available by July 1. In the interim,
Public Security Minister Martin Coiteux said, police check by testing
- ---
MAP posted-by: Matt