Cannabis legislation creates private retail system

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If ski towns in Colorado that allow legal cannabis sales are any indication, the future of retail business for the weed industry in the Bow Valley once July 2018 rolls around in Canada will be booming.

For communities like Canmore and Banff, the future of retail cannabis is becoming increasingly less hazy, as the province of Alberta and Minister of Justice and Solicitor General Kathleen Ganley introduced last week legislation to control and regulate its legalization.

The Act to Control and Regulate Cannabis sets out some of the rules about how the drug would be managed once it is legalized next year, including that retail sales would be open to private industry and the government would manage online sales.

“I want Albertans to know that we are listening to you and we believe this plan represents what the majority of Albertans want to see,” said Ganley during a press conference. “This is a major shift for our province and one that has to be made very quickly, with a lot of complex questions.”

The provincial framework has set out four priorities – to keep cannabis out of the hands of children, protect public health, keep roads and workplaces safe and limit the illicit marketplace.

Legislation introduced addressed issues around the sale and use of cannabis, while earlier in the week there were also changes announced to how impaired driving would be enforced in relation to legalized cannabis.

Ganley said by opening the market to private retail sales, there are fewer up front startup costs for the government and more opportunities for small businesses. The system would include restrictions on where retail sales could be located and strict government oversight on licencing by the Alberta Gaming Liquor and Cannabis Commission.

“We will work to put provincial rules in place across Alberta that include a set range of hours for operation, minimum distances from places like schools, training requirements for all staff and requirements around background checks,” Ganley said.

As for online sales, the minister said the most important criteria set by Albertans was age verification to keep cannabis out of the hands of youth. Having strong government oversight of online sales and age verification is the way to ensure those expectations are met, from the initial online transaction all the way to delivery of the product.

“Online sales ensure Albertans have access to a safe and reliable product, including those living in rural and remote communities,” she said.

The legal age for cannabis purchase and use in the legislation is 18, which also bans co-location of cannabis sales with alcohol, pharmaceuticals and tobacco sales, and establishes restrictions around where it can be smoked or vaped in public. Anywhere smoking tobacco is currently restricted would also apply to cannabis – inside vehicles with children and hospital grounds, for example – and anywhere youth are present.

Ganley noted there are still a number of unknowns in relation to how cafes and lounges would be regulated, as the federal government has yet to issue regulations around edibles – food, candy or baked goods that have a cannabis component.

Alberta Chamber of Commerce president and CEO Ken Kobly was supportive of the announcement that retails sales would be handled through a private retail model.

“We are pleased that one of our major recommendations on that subject has been accepted by the minister and presented here today,” Kobly said. “The private sector model sales of alcohol in Alberta shows the private sector can be relied upon for distribution safely.

“This decision strikes a healthy balance between free enterprise, responsible government and the safety of Albertans.”

The regulations around workplaces and the legalization of cannabis has yet to be presented by the province, but it is an issue at the forefront of the minds of employers, including the Bow Valley Chamber of Commerce.

The chamber is hosting a Learn at Lunch event Tuesday (Nov. 28) with lawyer and business owner Janet Nystedt on preparing workplaces for cannabis legalization.

Jeff Mooij – president of 420 Clinic – said he is excited about the retail sales direction as a small business owner himself.

“It is exciting to see the future of this,” Mooij said. “It is a big social change for our country and our province. “There is obviously much more work that needs to be done here in terms of licencing.”

He expressed concern that not enough licenced producers are operational or even approved by the federal government to handle the volume of legal cannabis sales that are set to begin July 1, 2018.

“What we need to worry about is making sure there is enough product in the province,” he said. “If we want to go up against the black market, we need a robust retail market.”

Mooij said Albertans have an appetite for a safe and regulated product and they are willing to pay for it.

His business has a retail location already secured in Canmore along Bow Valley Trail at Canmore Crossing. Mooij said the plan is for it to open as a retail dispensary for the legal sale of cannabis next summer.

“We are already facilitating Canmore patients through our Calgary location for clinics; we don’t see the need to open a clinic in Canmore specifically,” he said. “I am very excited about it – we are definitely going to have a sophisticated level of retail.”

At the beginning of October, the federal government introduced taxation plans for cannabis. The excise tax of $1 per gram of cannabis for pot sales up to $10, with a floor of 10 per cent of the total price for pot selling over $10, is in addition to any federal and provincial sales taxes collected.

The tax split currently proposed for revenues is 50/50 between the province and the federal government, although the Federation of Canadian Municipalities has been lobbying to include communities in the windfall.

Canmore Mayor John Borrowman said he isn’t holding his breath that cannabis revenues would provide any tangible benefit to municipalities.

That being said, he indicated without any more details yet on regulations about where retail sales are permitted, there are no plans for council to consider or make decisions on the issue.

“Once provincial regulations are available we would revise the Land Use Bylaw to reflect that,” he said.

Ganley said her expectation is there would be no gross revenue from legalized cannabis for some time, given the costs of setting up the entire legalization framework.

“This will cost the province considerably more than we will take in at this time, so there isn’t going to be a lot of revenue to go around,” she said. “We need to make sure the overall cost is staying in a place where we are able to capture (the illegal) market, in addition to the government providing online sales, we are in competition with retail sales.

“Those factors will drive where the price ends up, as well as the cost.”

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