HTTP/1.0 200 OK Content-Type: text/html Go Easy On Marijuana Regulation
Pubdate: Sat, 09 Sep 2017
Source: Hamilton Spectator (CN ON)
Copyright: 2017 The Hamilton Spectator
Author: David Clement
Page: A17


Ontario consumer advocate says overregulation will only encourage a
black market

The marijuana boom is going to hit Canada in 2018, but our country's
regulators are going to stifle potential growth. Canada already has
medical marijuana and it's been beneficial to the economy and more
importantly, to patients. As a nation, we can't let regulators stifle
the prosperity that could be generated with a legal recreational
market. With legal marijuana on the horizon, it is important that
regulators embrace the lessons we have learned from tobacco
regulations. By lessons, I mean not repeating the same mistakes, and
by mistakes, I mean branding bans and exorbitant excise/sin taxes.
That's what regulators have mistakenly done with tobacco and it's what
they want to do with marijuana.

We can look at plenty of countries - including Canada - for lessons
from failed tobacco policy. In some countries, the government has
eliminated branding from all tobacco products by enacting plain
packing, while also adding excessive levels of taxation. Not only have
these policies f ailed in their mission, they've created a prime
opportunity for criminal actors to flood the black market.

Take Australia, for example, that has in recent years enacted strong
regulation against tobacco. The Australian government mandates plain
packaging for tobacco products in the name of public health. However,
the country didn't see a significant decline in smoking because of
this policy. In fact, Australia has for the first time in over two
decades stabilized their smoking rates, which certainly isn't
something to celebrate.

Along with not accomplishing its goal, plain packaging came with the
significant externality of emboldening the black market. The reason
why a policy like plain packaging enables the black market is simple.
When the government eliminates branding from packaging, it becomes
easier and more profitable for criminals to pass off their contraband
goods. Because of plain packaging, criminal actors have raced to the
emerging black market in cigarettes. When government regulation
establishes a prohibition of a good as common as cigarettes, a black
market naturally rises. And in some cases, the black market is so
lucrative that even government officials buy in. At least that's what
happened in Australia, where customs and other officials with security
clearance were caught smuggling illicit tobacco products.

But that shouldn't come as a surprise. After all, government can't
stop human action and that reality has manifested in the black markets
that have risen due to prohibitions on alcohol, tobacco, and marijuana.

Regulating the branding on tobacco packaging hasn't reduced smoking,
and has ultimately done more harm than good. If Canadians are serious
about keeping marijuana out of the reach of children or even to limit
its sale at all, they best focus on limiting the growth of the
marijuana black market. When regulators want to mandate plain
packaging, and dictate who, when, and where can sell limited amounts
of marijuana, a black market is bound to exist. Canadians will be able
to find the products they want for cheaper and without the hassle of

What we do know, is that Canadians want legal marijuana. They want to
be able to know what they're purchasing and they will purchase
products where it's affordable. At the end of the day, price is a huge
determining factor on whether or not the black market for marijuana
will continue to thrive. If the government over taxes legal marijuana,
consumers will naturally remain in the black market. We've seen this
first hand with tobacco policy in the province of Ontario. From
2010-2013, contraband cigarette purchases began to soar, largely in
response to increased taxes. In fact, the Ontario Provincial Police
reported that highway patrols had confiscated over 100,000 cartons of
illegal cigarettes. Regulators should keep this very basic economic
principle in mind when determining the tax rate on legal marijuana.

What these regulators don't realize, is that they're at odds with the
desires of their constituents. Canadians favour legal marijuana -
that's why they voted for it in the first place. According to a recent
study by Nanos Research, a majority of Canadians support the sale of
marijuana by private companies instead of the government stores. The
data also illustrates that more Canadians support private marijuana
lounges to licensed businesses. This isn't a surprise to the average
Canadian. After all, they want the option to choose. And when
Canadians choose their marijuana products, they should be able to see
what it is they're buying similar to their experience with buying beer.

However, that notion hasn't stopped prohibitionists from pushing
anti-Consumer choice measures. They still want to mandate plain
packaging and implement excessive taxes for marijuana, policies that
will surely inhibit the black market. Don't let regulators control
your life. Let your representatives know that you support consumer

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David Clement of Oakville is the North American Affairs manager of the 
Consumer Choice Center in Virginia.
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