Pubdate: Wed, 03 Jan 2018
Source: Globe and Mail (Canada)
Copyright: 2018 The Globe and Mail Company
Author: Andre Picard
Page: A4


The most important lessons Canada can take from California revolve
around how to cater to consumers of cannabis.

On New Year's Eve, some Californians raised flaming joints in lieu of
the traditional champagne toast - a fitting gesture given that Jan. 1
marked the launch of the world's largest legal commercial market for

Canada can learn a lot from California's experiences as we prepare for
cannabis legalization on July 1, even though the respective
jurisdictions have as many similarities as differences in the way they
are approaching the end of pot prohibition.

Cannabis remains illegal under U.S. federal law, so states have to tap
dance a bit around that reality. (Recreational marijuana is already
legal in five other states and medical marijuana in 30 states.) In
Canada, cannabis will be legal from coast to coast.

In California, a person over the age of 21 can buy up to one ounce of
cannabis at a time and grow up to six plants for personal use.
Depending on the province, the legal age will be 18 or 19 in Canada,
and a similar amount, 25 to 30 grams, can be purchased and up to four
plants grown.

While California's legalization has gotten a lot of media attention,
the state has granted only 49 retail licences so far. Furthermore,
only six cities have allowed cannabis stores to operate, while more
than 300 have blocked non-medicinal sales.

This is a reminder that municipalities can - and will - throw a wrench
into plans for retail stores, despite federal and provincial laws. The
price of legal marijuana - the taxes in particular - is a big issue.

California has imposed an excise tax of 15 per cent on legal cannabis,
in addition to state and local sales taxes (from which medical users
are exempt) and cultivation taxes on producers.

Practically, that means the in-store price - about $50, similar to the
street value - of an eighth-ounce (3.5 grams) of top-quality product
will reach $65 after taxes. Canada is looking at a minimum price of $8
to $10 a gram, plus a $1 a gram excise tax and federal and provincial
sales taxes.

High-end products will be pricier, about $15 a gram, which means
Canadians will pay slightly less for cannabis than Californians,
including lower taxes.

Canada will have a mix of publicly owned and privately run retail
cannabis outlets. In California, it's all about private enterprise,
although priority for licences is going to the "non-profit
collectives" that have been able to sell medical marijuana legally
since 1996.

Allowing existing outlets to expand beyond the medicinal market to the
recreational one will give California a smoother transition to

By contrast, some provinces, such as Ontario, have declared war on
dispensaries. That will benefit state-run cannabis stores, but not
consumers, especially younger ones, who will be driven by the cost and
lack of selection to the black market.

In fact, the most important lessons Canada can take from California
revolve around how to cater to consumers of cannabis.

The cannabis stores that have opened in recent days all have one thing
in common: They look more like Apple stores than head shops.

"Bud-keepers" in crisp uniforms tend to consumers, who shop for
products principally by choosing from a menu displayed on an iPad.
Some stores have "bud-pods" - sealed sample jars that allow customers
to sniff the merchandise. They also offer home delivery.

In Canada, the planned outlets - public and private - seem a lot more
puritanical, with products hidden in locked cases and nothing as
radical as home delivery allowed (unless you buy online.)

In the early days of cannabis legalization in California, stores are
reporting that, in addition to the flowers, buds and oils that are
smoked or vaped, consumers are gravitating toward edibles such as
candies and honey, vapour pens and topical lotions.

One of the big flaws in Canada's regime is the delay in the
legalization of edibles.

Customers in California's new retail outlets are proving to be
middle-aged or older - baby boomers - a reminder that those drawn to
mainstream stores want to buy pot without risk of legal entanglements,
and they tend to be less price-sensitive.

With legalization, Canadian law will finally catch up with culture.
The next step is for our prohibitionist-minded legislators to allow
the retail environment to meet consumer demand and expectations.
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MAP posted-by: Matt