DELTA, British Columbia (AP) — Mat Beren and his friends used to drive by the vast greenhouses of southern British Columbia and joke about how much weed they could grow there.
Years later, it’s no joke. The tomato and pepper plants that once filled some of those greenhouses have been replaced with a new cash crop: marijuana. Beren and other formerly illicit growers are helping cultivate it. The buyers no longer are unlawful dealers or dubious medical dispensaries; it’s the Canadian government.
On Oct. 17, Canada becomes the second and largest country with a legal national marijuana marketplace. Uruguay launched legal sales last year, after several years of planning.
The cannabis investing frenzy has reached a fever pitch. With recreational marijuana use becoming legal in Canada next Wednesday and legalization efforts in the U.S. making steady progress, it seems like everyone from former Speaker of the House John Boehner to singer Jimmy Buffett wants a piece of the action. Shares of marijuana companies have soared, startups are proliferating and, while there may be a great deal of money to be made, there may also be a great deal of money to be lost.
It’s a profound social shift promised by Canadian Prime Minister Justin Trudeau and fueled by a desire to bring the black market into a regulated, taxed system after nearly a century of prohibition.
It also stands in contrast to the United States, where the federal government outlaws marijuana while most states allow medical or recreational use for people 21 and older. Canada’s national approach has allowed for unfettered industry banking, inter-province shipments of cannabis, online ordering, postal delivery and billions of dollars in investment; national prohibition in the U.S. has stifled greater industry expansion there.
Hannah Hetzer, who tracks international marijuana policy for the New York-based Drug Policy Alliance, called Canada’s move “extremely significant,” given that about 25 countries have already legalized the medical use of marijuana or decriminalized possession of small amounts of the drug. A few, including Mexico, have expressed an interest in regulating recreational use.
Ontario charging $5 for legal pot delivery, will use Canada Post as courier
“It’s going to change the global debate on drug policy,” she said. “There’s no other country immediately considering legalizing the nonmedical use of cannabis, but I think Canada will provide almost the permission for other countries to move forward.”
At least 109 legal pot shops are expected to open across the nation of 37 million people next Wednesday, with many more to come, according to an Associated Press survey of the provinces. For now, they’ll offer dried flower, capsules, tinctures and seeds, with sales of marijuana-infused foods and concentrates expected to begin next year.
The provinces are tasked with overseeing marijuana distribution. For some, including British Columbia and Alberta, that means buying cannabis from licensed producers, storing it in warehouses and then shipping it to retail shops and online customers. Others, like Newfoundland, are having growers ship directly to stores or through the mail.
Once the people of Ontario start ordering cannabis online, it will be delivered via Canada Post in around one to three days for a flat, province-wide cost of $5, according to the CBC.
Want to smoke legal pot on day 1 in Ontario? Youre out of luck
Federal taxes will total $1 per gram or 10 percent, whichever is more. The feds will keep one-fourth of that and return the rest to the provinces, which can add their own markups. Consumers also will pay local sales taxes.
Ontario’s online cannabis retailer, the Ontario Cannabis Store (OCS), has confirmed additional details surrounding how much it will cost to ship the plant when it becomes legal.
Some provinces have chosen to operate their own stores, like state-run liquor stores in the U.S., while others have OK’d private outlets. Most are letting residents grow up to four plants at home.
Ontario pot website will be available on mobile devices, will prioritize health info
Canada’s most populous province, Ontario, won’t have any stores open until next April, after the new conservative government scrapped a plan for state-owned stores in favor of privately run shops. Until then, the only legal option for Ontario residents will be mail delivery — a prospect that didn’t sit well with longtime pot fan Ryan Bose, 48, a Lyft driver.
“Potheads are notoriously very impatient. When they want their weed, they want their weed,” he said after buying a half-ounce at an illicit medical marijuana dispensary in Toronto. “Waiting one or two three days for it by mail, I’m not sure how many will want to do that.”
British Columbia, home of the “B.C. Bud” long cherished by American pot connoisseurs, has had a prevalent marijuana culture since the 1970s, after U.S. draft-dodgers from the Vietnam War settled on Vancouver Island and in the province’s southeastern mountains. But a change in government last year slowed cannabis distribution plans there, too, and it will have just one store ready next Wednesday: a state-run shop in Kamloops, a few hours’ drive northeast of Vancouver. By contrast, Alberta expects to open 17 next week and 250 within a year.
Video: Inside the Ontario Cannabis Store facility
There is no immediate crackdown expected for the dozens of illicit-but-tolerated medical marijuana dispensaries operating in British Columbia, though officials eventually plan to close any without a license. Many are expected to apply for private retail licenses, and some have sued, saying they have a right to remain open.
In terms of what products will be on offer, more than 70 strains of cannabis will be available when the store launches on Oct. 17, with an aim to eventually carrying 150. Customers will be able to search by brand, strain, by the amounts of THC and CBD, and by terpene profiles.
Ontario Cannabis Store releases details on how to buy marijuana online
British Columbia’s ministry of public safety is forming a team of 44 inspectors to root out unlawful operations, seize product and issue fines. They’ll have responsibility for a province of 4.7 million people and an area twice as large as California, where the black market still dwarfs the legal market that arrived in January.
Chris Clay, a longtime Canadian medical marijuana activist, runs Warmland Centre dispensary in an old shopping mall in Mill Bay, on Vancouver Island. He is closing the store Monday until he gets a license; he feared continuing to operate post-legalization would jeopardize his chances. Some of his eight staff members will likely have to file for unemployment benefits in the meantime.
“That will be frustrating, but overall I’m thrilled,” Clay said. “I’ve been waiting decades for this.”
The federal government has licensed 120 growers, some of them enormous. Canopy Growth, which recently received an investment of $4 billion from Constellation Brands, whose holdings include Corona beer, Robert Mondavi wines and Black Velvet whiskey, is approved for 5.6 million square feet (520,000 square meters) of production space across Canada. Its two biggest greenhouses are near the U.S. border in British Columbia.
“We used to joke around all the time when we’d go to Vancouver and drive by the big greenhouses on the highway,” he said. “Like, ‘Oh man, someday. It’d be so awesome if we could grow cannabis in one of these greenhouses.’ We drive by now and we’re like, ‘Oh, we’re here.”
Ontario will have online-only sales of marijuana for the first several months after recreational use is legalized on Oct. 17, with private retail stores not expected to open until April. The government-run Ontario Cannabis Store website, ocs.ca, will go live at 12:01am on Oct. 17 and delivery will take one to three days, officials said.
Next to Canopy’s greenhouse in Delta is another huge facility, Pure Sunfarms, a joint venture between a longtime tomato grower, Village Farms International, and a licensed medical marijuana producer, Emerald Health Therapeutics. Workers pulled out the remaining tomato plants last winter and got to work renovating the greenhouse as a marijuana farm, installing equipment that includes lights and accordion-shaped charcoal vents to control the plant’s odor. By 2020, the venture expects to move more than 165,000 pounds (75,000 kg) of bud per year.
Some longtime illegal growers who operate on a much smaller scale worry they won’t get licensed or will get steamrolled by much larger producers. Provinces can issue “micro-producer” licenses, but in British Columbia, where small-time pot growers helped sustain rural economies as the mining and forestry industries cratered, the application period hasn’t opened yet.
Sarah Campbell of the Craft Cannabis Association of BC said many small operators envision a day when they can host visitors who can tour their operations and sample the product, as wineries do.
Officials say they intend to accommodate craft growers but first need to ensure there is enough cannabis to meet demand when legalization arrives. Hiccups are inevitable, they say, and tweaks will be needed.
“Leaving it to each province to decide what’s best for their communities and their citizens is something that’s good,” said Gene Makowsky, the Saskatchewan minister who oversees the province’s Liquor and Gaming Authority. “We’ll be able to see if each law is successful or where we can do better in certain areas.”
British Columbia safety minister Mike Farnworth said he learned two primary lessons by visiting Oregon and Washington, U.S. states with recreational marijuana. One was not to look at the industry as an immediate cash cow, as it will take time to displace the black market. The other was to start with relatively strict regulations and then loosen them as needed, because it’s much harder to tighten them after the fact.
This expert insight from Michael A. Robinson originally ran in Strategic Tech Investor on October 11, 2018
Canada has legalized recreational marijuana nationwide, and that law goes into effect Oct. 17 – exactly six days from today.
That means any adult over 18 will be able to just walk into a dispensary and buy up to 30 grams of cannabis. That could be flower, oils, or – in some places – seeds and plants.
Ontario and Nunavut – Canadas most and least populated provinces, respectively – will have no stores open Oct. 17. British Columbia has one store for its 4.8 million residents, and the Northwest Territories will be home to just six government-run stores – about one per 7,420 residents.
While the start to legal cannabis may be a little slower than expected, it wont stay slow for long. Manitoba has set a goal to have 90% of residents live within 30 minutes of a dispensary. Ontario is working on opening as many as 40 stores. Already, hundreds of companies have applied to be retailers.
Michael A. Robinson is one of the top financial analysts working today. His book “Overdrawn: The Bailout of American Savings” was a prescient look at the anatomy of the nations S&L crisis, long before the word “bailout” became part of our daily lexicon. Hes a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores “whats next” in the tech investing world at Strategic Tech Investor.