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Leaked Report: Canada Aims at Ending $7 Billion Black Market

A report leaked by panel tasked with planning Canada's cannabis legalization framework shows a strong focus on undercutting the black market.
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Leaked Report: Canada Aims at Ending $7 Billion Black Market

Canadian Prime Minister Justin Trudeau was elected just over a year ago, with a sizable portion of voter support growing from his promise to legalize cannabis nationwide. Now a leaked report from the panel tasked with planning Canada’s legalization scheme shows a strategy of aggressively undercutting the country’s $7-billion-per-year marijuana black market, which may mean making legal cannabis available to all adults over the age of 18.

Legal cannabis has been a long time coming in Canada. And while the government’s advisory report to provinces on the framework of that legalization won’t be officially made public until December 21, sources familiar with its contents told the National Post that its primary focus is vigorously undercutting Canada’s $7-billion -a-year illicit cannabis trade.

And although the Canadian Medical Association has publicly recommended a minimum age of 21 to purchase cannabis, the report is expected to recommend allowing anyone over the age of 18 to purchase from the new legal market.

The implementation of rules and regulations will fall to individual provinces, but according to the National Post’s report, the report strongly urges pricing cannabis with the express goal of undercutting street dealers:

“To eat into the black market, the report is expected to recommend prices should be lower than the street price of $8-$10 a gram. This would reduce the amount of tax revenues available to federal and provincial governments but would be justified by the principle of guaranteeing a safe and controlled supply.”

Canada’s Liberal party, which is spearheading the legalization effort, isn’t facing major pushback on the reduced tax revenue because they’ve consistently approached the issue from a standpoint of public safety and cutting off money to crime syndicates.

The report is expected to recommend maintaining the medical status of the existing 36 licensed cultivators and seek participation from new sources for the broader legalization supply.

How the cannabis is distributed will take shape based on the prevailing attitudes in a given province. In Ontario, for example, it seems likely that the 600 or so province-owned liquor stores could become distribution points for legal marijuana.

And in places that already have a large number of cannabis dispensaries, like British Columbia, the government is expected to require they purchase from a licensed provider.

The leak of the report has garnered controversy and suspicions of insider trading. From the Post:

“During question period Thursday, [Justice Minister] Wilson-Raybould was pressed by the Conservatives about a spike in the trading of pot company stocks that they allege may have been caused by a leak of the report. On Nov. 16, the TSX halted trading on six medical marijuana companies. Alex Nuttall, an Ontario Conservative MP, asked the minister if she was investigating a possible leak.”

One company entering the world of public trading is Emblem Cannabis Corp., which is headed by former Purdue Pharma Canada president, John H. Stewart — the man who invented OxyContin.

From the Globe and Mail:

“Wealthy from his days at Purdue, where he retired three years ago, Mr. Stewart has invested $1-million of his own money into his new company, one of 36 medical-marijuana producers licensed by the federal government. Emblem is now seeking to promote cannabis as an alternative to prescription painkillers – and profit from the opioid crisis Purdue was instrumental in creating.”

TELL US, do you think the legal age to consume cannabis should be 18 or 21?


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