The Good and the Bad in Canada's Proposed Marijuana Regulations

How will the government promote competition while banning advertising and promotion?



Yesterday the task force charged with advising the Canadian government on how to legalize marijuana unveiled its recommendations, which are not quite as consumer-friendly as anticipated. Here are some of the good elements:

Age limits. The task force recommends a minimum purchase age of 18, although it says jurisdictions with a drinking age of 19 (British Columbia, Newfoundland and Labrador, Nova Scotia, and New Brunswick, plus three territories) might want to "harmonize" the two rules. The minimum purchase and consumption age in every U.S. jurisdiction with legal marijuana is 21, which means most college-age cannabis consumers are still breaking the law.

Possession and sharing. The report says adults should be allowed to possess up to 30 grams (an ounce) in public, which is the limit in seven of the nine U.S. jurisdictions that have legalized marijuana so far. It also says "social sharing" should be legal.

Home cultivation. All but one of the U.S. jurisdictions with legal marijuana allow consumers to grow their own, a policy the task force endorses, recommending a limit of four plants per household.

Sales. The report says marijuana products should be available through direct-to-consumer deliveries, which only some of the U.S. jurisdictions allow, as well as storefronts, although it recommends separating cannabis sales from tobacco and alcohol sales.

Edibles. The task force says foods and beverages containing THC should be allowed, as long as they do not also contain caffeine or alcohol, do not exceed legal limits on dose per serving, and do not appeal to children too much.

Consumption outside the home. The task force recommends that provinces be allowed to "permit dedicated places to consume cannabis such as cannabis lounges and tasting rooms, if they wish to do so." That might open the door to cannabis cafés where people can consume marijuana purchased on the premises, or at least establishments that let customers consume marijuana they bring with them.

Here are some of the worrisome recommendations:

Advertising and promotion. The task force thinks advertising and promotion should be banned with very narrow exceptions, similar to the Canadian policy for tobacco. It also wants the government to mandate plain packaging, limited to "company name, strain name, price, amounts of delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD) and warnings and other labelling requirements." At the same time, the task force wants to "encourage a diverse, competitive market that also includes small producers"—a tall order when businesses can barely communicate with consumers.

Taxes. The report says taxes should be based on potency, which is not necessarily a terrible idea, assuming that there must be special taxes on cannabis at all. But it also says taxes should be aimed at discouraging consumption: "Taxes should be high enough to limit the growth of consumption, but low enough to compete effectively with the illicit market." Since you can be sure that black-market dealers won't be jacking up their prices in the hope of minimizing sales, that will be a tough balancing act. The task force itself notes "the experience in Washington, where a high tax at the start of legalization, combined with a shortage of legal product, strengthened the existing illicit market."

Driving under the influence. The task force recommends research aimed at establishing a scientific basis for a "per se" drugged driving standard based on THC blood levels. Although the report concedes there is no such basis so far, it may nevertheless encourage legislators to impose a limit that is unscientific and unfair.

There is no guarantee that legislators will take the task force's advice. Prime Minister Justin Trudeau has said he plans to introduce marijuana legislation this spring.