Some pot policies end up boosting the black market

The first 15 months of cannabis legalization has certainly had its share of ups and downs for the burgeoning new industry. Alberta has taken a far more sensible approach to regulation than some other provinces, but that hasn’t meant that the industry here has been spared from this tumult.

There is some reason for optimism as we embark upon a new year. Some of the issues that had been plaguing the industry — product shortages and a moratorium on new retail licences, for example — have largely been sorted out and edible products, which became legal nearly three months ago, will soon start hitting store shelves.

There remains, however, a persistent black market that threatens to undermine whatever success the industry might look forward to in 2020. No one expected the black market to be eliminated within the first year or two of legalization, but it’s also not unreasonable to expect that government policies not help perpetuate its existence. Unfortunately, Alberta seems to be falling into that trap.

In early October, when the Alberta government announced that the Tobacco and Smoking Reduction Act would be reviewed to see what additional rules or regulations might be needed for e-cigarettes, it did not appear that cannabis vape products would be a part of that review. Indeed, that’s the message that Alberta’s cannabis industry says it received from the government at the time.

Now, suddenly, just as the industry was preparing to roll out vape products, the Alberta government has informed them that they have been postponed indefinitely. The statement from Alberta Gaming, Liquor and Cannabis even seems to hint that they might never be permitted for sale: “AGLC and government are considering

There is some reason for optimism.

various aspects related to cannabis vape products to determine whether or not they will be available for consumer purchase in Alberta.”

All cannabis products sold in Alberta first go through the AGLC, which acts as a wholesaler, so it’s entirely possible that cannabis vape products have been purchased and are sitting in an AGLC warehouse. This could affect all taxpayers, not just cannabis users and retailers.

This decision is clearly in response to the health concerns around the outbreak of lung illness that has been linked to vaping. So on the surface, the province’s hesitation on cannabis vaping products might seem prudent.

However, this might also turn out to be dangerously counterproductive. For many cannabis users, the idea of vaping the product as opposed to smoking it has some obvious appeal. And if such products aren’t available legally, some might turn to the black market.

But as we’ve now begun to learn, as the vaping illness mystery has started to unravel, is that steering people toward the black market is probably the worst possible policy response.

Just before Christmas, the U.S. Centers for Disease Control officially confirmed that the outbreak “can be attributed to exposure to Thc-containing products that also contained vitamin E acetate.”

Vitamin E acetate has been used as a thickening agent in certain black market THC vaping products. It is not an authorized ingredient for legal products. So with a clearer understanding of the cause of the outbreak and the dangers of the black market, what might have originally seemed like a prudent move now appears to be anything but.

Let’s hope this will turn out to be just another temporary setback for an industry that in a relatively short time has become all too used to them. At some point, however, governments need to get past their fixation on red tape and taxation and focus on an approach that will give the legal industry a leg up on the black market.

For example, Alberta might have made the right decision on how cannabis should be retailed, but the tax rate we apply to the product itself is the highest of all the provinces. Then, whenever common sense prevails on the vape front, we can turn our attention to this next. “Afternoons with Rob Breakenridge” airs weekdays 12:30-3:30 p.m. on 770 CHQR. rob.breakenridge@corusent.com twitter.com/robbreakenridge