The market potential for legalized marijuana is enormous.\u00a0 One market in particular that could be significantly impacted is alcohol beverages \u2013 a trillion dollar market.\u00a0 Another is the \u201cwellness\u201d market \u2013 selling of a natural product with significant health benefits, from pain management to Alzheimer\u2019s and insomnia.<\/p>\n
The potential to offer an alternative to the alcohol market also rests on the many well-known health and social hazards of alcohol consumption, from excessive sugar and hangovers to cancer.<\/p>\n
If the alternative has none of the negatives but also can claim health benefits, then it has the potential to be a significant disrupter.<\/p>\n
On November 8th<\/sup> nine (9) U.S. states voted on legalizing marijuana with only one state (Arizona) rejecting legalization.<\/p>\n Those other eight (8) states \u2013 including California, Florida and Massachusetts \u2013 have a combined population greater than Canada.\u00a0 Governments around the world are also considering legalization.<\/p>\n The march toward full recreational legalization continues apace.\u00a0 The world is now looking to Canada as the potential model on how a country can legalize cannabis for responsible adult consumption.<\/p>\n The problem with the U.S. market is a legal one: marijuana remains illegal at the federal level.\u00a0 Although simple possession is not federally prosecuted in those states that have legalized marijuana, because it remains illegal, it causes a host of issues for investors and financial institutions.\u00a0 Under the Obama administration, \u201cguidelines\u201d were issued to federal prosecutors not to allocate resources to possession charges.\u00a0 Additional guidelines were issued to federal institutions.\u00a0 These guidelines have allowed the marijuana industry to operate but with considerable legal issues which can only be resolved by an act of Congress.\u00a0 Until that problem is solved, the U.S. marijuana industry will be stunted in its potential growth.\u00a0 Even the present environment could be upended if the new Trump administration changes the existing guideline.\u00a0 That problem however could benefit Canadian marijuana companies.<\/p>\n The issue for Canada is what will the legislative framework look like?<\/p>\n The Trudeau Government provided several ministers with the mandate to develop a legislative scheme for recreational marijuana.\u00a0 Those Ministers in turn established the Task Force on Marijuana Legalization and Regulations, which is to report in November 2016.\u00a0 That report is to provide advice on what a legalization framework will look like.\u00a0 Certain key issues will be considered, most of which have been the subject of debate and legislation for medical marijuana:<\/p>\n Those issues were, of course, front and center when the existing regulations were drafted and the system now in place appears to be working well with the exception of at least two (2) significant issues:<\/p>\n Firstly, with respect to distribution, the good news is that Canada has a well-established government controlled (except Alberta) distribution network for alcohol products.\u00a0 These distribution networks were established after prohibition precisely for the same reasons that are being debated for marijuana, including restricting sales to minors.\u00a0 In order to defuse the profusions of retail store-front operations, the legalization scheme will need to ensure better distribution than that which exists today.\u00a0 The provincial alcohol distribution networks are the logical and simple solution.<\/p>\n With respect to derivatives, this will be an important consideration when designing the legislative scheme.\u00a0 This government will have the benefit of an opinion from the Supreme Court of Canada.\u00a0 In R v. Smith<\/em> whereby a prohibition of derivatives under previous legislation was struck down as being in contravention of Section 7 of the Charter of Rights and Freedoms.\u00a0 The previous government expanded the exemption by including cannabis oil to fresh and dry cannabis.\u00a0 The bigger question is whether a broader set of derivatives will be allowed for commercial distributors.\u00a0 It is that issue which opens up the potential attack by marijuana on the alcohol industry.\u00a0 The rationale behind R v. Smith<\/em> would appear to provide the grounds for the government to allow for the commercial distribution of derivatives.<\/p>\n These issues will be addressed and the answers provided when the government introduces its legislation in the spring of 2017.<\/p>\n Tim McCunn is a Partner and lawyer in the Business Law Group at Perley-Robertson, Hill & McDougall. He can be reached at 613.566.2831 or tmccunn@perlaw.ca.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The market potential for legalized marijuana is enormous.\u00a0 One market in particular that could be significantly impacted is alcohol beverages \u2013 a trillion dollar market.\u00a0 Another is the \u201cwellness\u201d market \u2013 selling of a natural product with significant health benefits, from pain management to Alzheimer\u2019s and insomnia. The potential to offer an alternative to the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"wds_primary_category":0,"wds_primary_expertise_area":0,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-1944","post","type-post","status-publish","format-standard","hentry","category-publication","expertise_area-cannabis-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/1944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/comments?post=1944"}],"version-history":[{"count":1,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/1944\/revisions"}],"predecessor-version":[{"id":2940,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/1944\/revisions\/2940"}],"wp:attachment":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/media?parent=1944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/categories?post=1944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/tags?post=1944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n
\n