Canada Legalises Cannabis, But There’s Not Enough to Go Around

By Sonia Hickey and Ugur Nedim

Less than a week after Canada legalised recreational cannabis, the country is running out of weed.

Licensed dispensaries are struggling to keep up with demand, with some forced to post “out of stock” signs and close shop.

Canada is only second country in the world behind Uruguay to legalise (rather than just decriminalise) the use and possession of cannabis, and the world has been watching with interest as legislators rework laws, as the economy gets a boost, the black market shrinks and the government begins to reap the financial benefits of new types of taxes on private suppliers, taxes on purchases, general income tax from private cannabis-related businesses and income from state-owned businesses.

New laws

Canadians over the age 18 or 19 (depending on the province) are now allowed to possess up to 30 grams of cannabis, while households can grow up to four plants.

Canadians can also purchase the drug and related products at dispensaries, and order them through websites or shops. Some suppliers are state-owned while others are owned privately. Anyone caught selling the drug to minors will face up to 14 years in prison.

The new laws also effectively pardon those with convictions for possessing less than 30 grams of the drug.

Despite cannabis being legalised on 17 October, it’s understood that some customers began pre-ordering supply as early as September.

Statistics suggest that 5.4 million Canadians will buy cannabis from licensed dispensaries this year – which is about 15 per cent of the population.

Demand exceeds supply

A study released earlier this year by the University of Waterloo and the CD Howe Institute foresaw a supply shortage, predicting licensed producers would only be able to meet about 60 per cent of demand in the first year of legalisation.

Many who’ve missed out are angry, and growers have been unable to say exactly when they will be able to meet the demand. There are now concerns about what will happen over the coming months, as only 111 stores of a planned 250 opened their doors in time, and many of those that opened have now had to shut down due to a shortage in product. The remaining stores are set to launch by 2019, provided there is enough stock.

The Canadian cannabis market is estimated to be worth around $4.2 billion a year, and the government projects collecting nearly $300 million in taxes as a direct result of legalisation.

The government also expects to make hundreds of millions of dollars through saving money that would otherwise be spent on enforcing laws and putting offenders for small possession and limited cultivation through the judicial process.

But, the government has always maintained that one of the major reasons for introducing reform has been to bring black market operators into a regulated system, and to prevent younger people from accessing cannabis.

Implementing legalisation

Medicinal cannabis has been legal in Canada since 2001, with the Trudeau government spending the last two years working towards legalisation for all purposes. This required amended existing laws, enacting new ones, setting up a licencing scheme and formulating guidelines for distribution and sale.

Licensees are subject to strict advertising rules, similar to those relating to tobacco, and the plant can only be sold in plain packaging of a single, specified colour.

Other countries

Uruguay became the first country to legalise cannabis use and possession in 2013. In the United States, nine states and the District of Columbia have legalised the plant.

But despite moves in Australia to make medicinal marijuana legal, there are no plans by the major parties to legalise the plant for recreational use – as jurisdictions continue to criminalise the possession, cultivation and sale of cannabis.