Pot legalization means challenges for provinces

The Trudeau government is set on legalizing marijuana by next summer. While they will enjoy the political payoff of appearing progressive on the issue, all of the problems and logistics of legalizing pot will fall on the provinces.

There are strong correlations between how a drug or an indulgence like gambling is made available to the public and the propensity for individuals to indulge in it, and the negative health and social outcomes associated with its use.

Provincial governments might want to draw lessons from the last time an illegal substance was legalized — alcohol — following prohibition in the late 1920s, as well as insights from the current public health efforts to eliminate tobacco use. For starters, it might make sense to make acquiring recreational marijuana reasonably expensive and somewhat difficult.

All provincial governments (except Alberta, which eliminated its liquor board) should consider only selling recreational marijuana in government liquor stores because they have the secure infrastructure to deal with a drug with narcotic properties. They also have professional staff and secure logistical facilities to ensure marijuana is distributed responsibly. This will eliminate the potential political problem of licensing and determining where (and when) dispensaries will be permitted to open, and eliminate the possibility of organized criminals establishing and operating dispensaries.

Most critically, government should not only control the retail end of marijuana, but the wholesale side too. They should sell recreational marijuana as a “store brand” in plain packaging, and offer only a few different types. This will prevent manufacturers from developing and promoting specific brands of pot through advertising campaigns.

“Store brands” are more profitable for retailers largely because they gain more control over manufacturing and cut out supplier middlemen. As the sole wholesaler in a province, provincial liquor boards would be able to drive hard bargains with manufacturers.

There must also be significant taxes imposed on pot. But taxes will not earn significant revenues as governments must also cover the costs associated with its misuse.

Government revenue from the sale of pot will already be restricted given the decline in pot prices over the last 25 years: a gram of pot in the 1990s cost $15; today it is less than $10.

Contrary to popular belief, the legalization of marijuana will require an increase in police and legal efforts to stamp out the black market. When government liquor commissions took over alcohol distribution, bootleggers had to be eliminated or they would undercut the state’s monopoly on sales and its ability to control how it was sold and consumed.

Policies will also need to be developed to allow the police to determine which pot has been legally procured and which has not. Since federal legislation will permit individuals to grow their own marijuana plants, verifying legally procured marijuana will be difficult.

Provinces should also be wary about offering edible pot. Ingesting marijuana substantially increases its potency and is often sold as child-attractive products such as brownies or gummy bears, substantially increasing the risk of accidental consumption, including by children. If provinces decide to sell edibles, they should ensure that dosage amounts per item are consistent among different products, and presented in a manner that is easy for consumers to understand.

The provinces will also need to establish a permit and purchase tracking system. That would allow government to determine who is purchasing marijuana and if individual sales could be tracked to original purchases. This would aid in preventing marijuana ending up in the hands of minors. Persistent violators who resell marijuana, for instance, could have permits revoked.

Governments should consider restricting the purchase age to 21 as recommended by many medical practitioners, and in order to limit consumption and normalization of its use. There should also be no advertising or promotion of marijuana.

I make these suggestions as a way to make the best of a very difficult situation. Consumption of marijuana will likely rise, as will the associated costs of dealing with its effects on individuals. Like many issues in Canadian federalism, this is a classic one where the federal government is wholly detached from the reality of implementing the policy, and the real costs associated with it.