National Post

A disjointed approach to the black market

- Jorge Araya Jorge Araya is president and CEO of Imperial Tobacco Canada.

For nearly a century, the marijuana industry in Canada has been left to the black market. This has enriched criminal organizati­ons, promoted violence in communitie­s and done little to prevent youth access to the drug. Today, the federal government is seeking to redress this issue and, by legalizing marijuana, it intends to shift it from the hands of criminals and into a more responsibl­e marketplac­e.

The policy’s success will largely depend on the regulatory details, which will govern aspects of sale ranging from taxation to packaging and promotion.

If the government is serious about keeping criminals out of future marijuana sales, it must ensure pricing is competitiv­e, that consumers can identify legal brands versus illegal supply, and that access is convenient.

After all, why would consumers buy from a l egal source if the price is considerab­ly higher, if they cannot identify trustworth­y brands, or if the legal products do not satisfy their preference­s?

To this point, indication­s seem encouragin­g that the federal government’s approach is informed, prag- matic and reasonable. While this is good news, it also highlights a glaring inconsiste­ncy between the government’s approach to marijuana versus tobacco.

Canada faces a very serious problem with illegal tobacco: According to the RCMP, contraband tobacco is a multi- billion- dollar industry run by sophistica­ted organized crime groups. Nearly a quarter of the to- bacco consumed in t his country is illegal; our government­s are deprived of more than $ 2 billion in lost tax revenues each year, and legitimate retailers are pushed out of business.

While the government is rightly concerned with ensuring the competitiv­eness of the legal marijuana industry, its tobacco control policies provide advantages to the contraband industry. Let us examine some of the most blatant examples of contradict­ory policies: Finance Minister Bill Morneau has stated that “we want to keep criminal elements out, and keep cannabis out of the hands of children … this will mean keeping taxes low.”

Meanwhile, tobacco taxes account f or 70 per cent of the price of cigarettes, which allow criminals to sell illegal tobacco at a small fraction of the cost of legal products. The government’s marijuana bill appears to allow for on-package branding, so long as it does not appeal directly to youth.

Meanwhile, 75 per cent of a package of cigarettes i s already occupied by a graphic health warning, and the government is in the process of removing all remaining branding ( including colours, logos, different fonts and trademarks) from tobacco packaging.

The government plans to allow a variety of formats for marijuana products, in- cluding edibles ( e. g., baked goods and gummy bears) and multiple flavours.

Meanwhile, nearly all flavoured tobacco products are already banned, and the government plans to standardiz­e the shape, size and appearance of cigarettes, which will make it virtually impossible to differenti­ate legal from illegal products.

The government has made no indication the advertisem­ent and promotion of marijuana products will be banned, and public figures like The Tragically Hip and Trailer Park Boys have already been signed as marijuana brand ambassador­s. Meanwhile, nearly all forms of marketing, advertisem­ent and sponsorshi­p of tobacco products are banned.

The government i s no doubt serious in its intent to responsibl­y regulate access to a risky product like marijuana, and reduce access to youth. After all, regular youth marijuana use in Canada is nearly six times greater than regular youth tobacco use. If its marijuana policies are sufficient to protect youth from product risks, as well as curtail the illegal industry, why are they not adequate for tobacco?

In an age of progressiv­e policies, the same principles used by our government to oversee their approach to marijuana should also be applied to tobacco. Additional consumers will not be tempted by the black market, taxpayers will be better off, and only the criminals will complain.


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