The Devil Is in the Details

The federal government’s move to legalize the recreational use of marijuana in October 2018 raises many questions about what this will mean for Canada and Canadians. Canada is only the second country in the world to formally legalize the drug and the first G7 country to do so. The government made the move to deal with a situation where, as the 2015 Liberal campaign platform noted, illegal cannabis falls into the hands of minors, large profits are generated by organized crime, and many people are trapped in the criminal justice system for what is arguably a victimless crime. While the legalization of marijuana in Canada begins with a straightforward change to the Criminal Code, its ramifications go far beyond this. It will have a serious impact on the country’s international treaty commitments, interprovincial relations, taxation, and regulatory regimes. And, of course, it will have a profound impact on social and health policies and possibly on the health of users.

Andrew Potter, an associate professor at the McGill Institute for the Study of Canada, a former columnist for Maclean’s, and former editor-in-chief of the Ottawa Citizen, is a co-editor (with McGill law professor Daniel Weinstock) of High Times: The Legalization and Regulation of Marijuana in Canada, a collection of essays being published in March by McGill-Queen’s University Press. He conversed recently with James McIntosh, a professor of health economics at Montreal’s Concordia University.

Their exchange was conducted by e-mail.

James McIntosh: First, let me congratulate you on an interesting and informative book. It’s a series of essays dealing with a number of legal and institutional issues involving the legalization of marijuana in Canada. Some of these are quite controversial,  and not all of the essays offer insights that might have been expected or what readers wanted to hear. The main focus of the book is a preliminary evaluation of how successful the actual implementation has been. I think it’s an important first step in trying to come to grips with one of the most important policy challenges since the legalization of alcohol. It should be seen as the start of the dialogue on managing marijuana, which hopefully will lead to a better understanding of how the policy is working and how it might be improved.

Perhaps you could provide a brief introduction to your book and what you think are the main concerns that Canadians should have about the specific procedures that have been adopted by the various provinces.

Andrew Potter: Most of the essays in the book arose out of a conference last April hosted by Daniel Weinstock, director of the Institute for Health and Social Policy at McGill University, which I helped organize. To fill out some gaps in the areas we wanted to cover, we commissioned a few additional essays.

The papers cover five main areas: the political dynamic of legalization, the public health issues it raises, the legal implications of the new regime, the economics of legalization, and finally the international context of Canada’s decision.

In the lead-up to legalization, the Liberals made a point of repeatedly emphasizing the rationale for the change in policy: it was to protect minors, undercut the black market and the organized crime that profited from it, and keep otherwise law-abiding adults from getting trapped in the criminal justice system for what is for the most part a harmless recreational activity. And so, from a policy perspective, the primary concern facing the Liberal government as it fulfilled its promise to “legalize, regulate, and restrict access to marijuana” was whether it could achieve these goals without making the situation worse.

The ambition of the book is to provide a baseline framework for evaluating these goals of the new cannabis regime, situated as it is within the very complicated structure of the Canadian federation and the international community of which Canada remains a part.

McIntosh: Alana Klein, in her essay in the book on harm reduction makes the point that the content of the new bill, the Cannabis Act—the new legislation that replaces the Controlled Drug and Substances Act—is more oriented toward punitive measures, prohibition, and punishment than it is toward harm-reduction strategies. She notes that this runs counter to what was proposed by the Task Force on Cannabis Legalization and Regulation,1 which formed a basis for the Liberals’ plans for legalization. She argues that this approach could ultimately undermine the authority of the judicial system in exactly the same way that legal sanctions in the system before legalization had minimal impact on drug use behaviour because users and distributors paid no attention to the law. What do you think of that idea?

Potter: I wouldn’t want to speak for Klein, but this idea that the Cannabis Act could end up sparking a renewed war on drugs is one that has come up in a number of different contexts since the framework for legalization became clear. One obvious way this might happen is if the black market proves to be more tenacious than expected. As we note in the introduction to the book, with legalization it is not as if the Canadian government simply lifted the criminal prohibitions on the existing, thriving, illegal marijuana economy. Instead, what it did was set up a parallel, legal marketplace for cannabis that it hopes will ultimately drive the illegal market out of existence. But this will only happen if the legal market can out-compete the private market on a number of fronts, including price, convenience, safety, reliability, selection, and so on. If the legal market struggles, there will be a great deal of pressure—not least from Big Cannabis—for the government to crack down on the persisting black market.

There are other ways that the new regime might trend toward prohibition and punishment. This includes the extremely draconian penalties for selling to minors, the fact that minors themselves are some of the most avid consumers, and finally the unavoidable problem of driving under the influence.

Ultimately, I get the sense that the federal government is treating the mere fact of legalization as its piece of the harm-reduction strategy while leaving the rest of it to the provinces. This contrasts with such jurisdictions as Portugal, which has made a point of integrating its decriminalization strategy with its
healthcare system.

Is that how you see it?

McIntosh: I think that legalization is a great harm-reduction strategy. In 2013 in Canada, almost 59,000 possession offences involving marijuana were recorded by the police. This type of offence will largely disappear under the new regime, and that is a great accomplishment that in itself makes the legalization policy well worthwhile. But like most legal solutions to social problems, it only goes part of the way. Moreover, legalization does not necessarily mean real legalization if the legal age for using is set at eighteen or twenty-one. And what will the sanctions for underage use be? I see this as a big challenge.

The largest proportion of possession offences involve adolescents. It is quite clear that legal sanctions up to legalization have been ineffective in persuading young people not to use marijuana. Data from the 2012–13 Youth Smoking Survey shows that teenagers start using marijuana on average around age fourteen.2 The fact that marijuana was illegal at that point appears to have had little or no impact on their behaviour.

Early marijuana use involves enormous personal costs. Some appear as respondents get older. Examples are higher risks of mental illness like schizophrenia, but there are also strong negative effects that arise at the time teens actually use marijuana. My current research, based on the survey mentioned above, shows that school grades are seriously affected by regular marijuana use under the age of eighteen. Students who use marijuana every day are three times less likely to be in the top school grade category, and ten times more likely to be at the bottom of the grade distribution, compared to “never users.”

What is needed is an effective policy to reduce marijuana use among adolescents. This is the type of policy that Klein is advocating. The Liberal government’s plan included education for young people about the risks of the serious health consequences of using marijuana before the age of twenty-one. We do know that school education policies directed at this age group to reduce tobacco use have been very effective.  I would argue that because perceptions of potential harm from early marijuana use are based on misconceptions of how harmful, health-wise, marijuana use can be, making adolescents more knowledgeable about the harm it can cause them is likely to produce more favourable results.

However, the actual mechanisms for implementing the legalization have been left to the provinces to determine, and the only area under federal jurisdiction remains the Criminal Code. Even the legal age for marijuana use and the right to self-cultivation were devolved to the provinces. As a result, it is not really surprising that the new federal legislation does not address the potential health issues involving adolescents as the Liberal government had originally intended.

Questions about what age teenagers should be allowed to legally use marijuana are considered in Weinstock’s essay. From a harm-reduction perspective, he argues that it might be advisable to set the age of consent at eighteen or possibly even sixteen. Do you think that he has a valid case here?

Potter: Weinstock’s essay left me highly conflicted. On the one hand, I find the notion of allowing sixteen-year-olds to consume marijuana legally instinctively repellent—it just makes me really uncomfortable. But that’s the case with a lot of harm-reduction-style arguments: once you accept the inevitability of what you find repellent, the key is to figure out how to mitigate the harmful effects. Weinstock’s argument amounts to presenting readers with the following choice: Is it better to have x number of minors consuming marijuana of dubious quality and unknown strength that was obtained from criminals or to have perhaps twice that number of minors consuming marijuana of a known quality and strength obtained through legal outlets? And he concludes that choosing the first option would be morally reprehensible.

What I think tips it in Weinstock’s favour is the research that shows that one of the major factors driving the negative effects of marijuana on the adolescent brain is strength—that is, THC content. The higher the content, the worse the effect, and the THC levels in black market marijuana have been climbing for years. And so, the more we can channel teens into consuming lower THC content marijuana, the better.

There’s a lot of ifs and mights and coulds here, for sure. Part of the problem, of course, is that the legislation has such crazy penalties for people caught selling or providing marijuana to minors—up to fourteen years in prison. And while I see the rationale for it (you need to make it highly risky for black market dealers to sell to minors), it has the side effect, I think, of making it hard for parents to monitor and control their kids’ use. Kids hide their use from their parents. I’ve wondered if there might be room for some sort of policy innovation here, where parents—and parents alone—could be permitted to provide marijuana to their children starting at age sixteen, in the same way we let parents oversee their teenagers’ drinking. Or is that overcomplicating things?

At any rate, I find the issue of the age of consent to be one of the most difficult issues here. It doesn’t really arise in the context of alcohol because there’s not really a black market in moonshine. Teens who want to drink either get their older siblings to buy legal booze for them or they steal it from their parents.

But this line of thinking leads me to a much broader question, which I had not really considered before, and that is whether legalization itself might have been the wrong option. You and I both agree that the status quo was unacceptable, and that simply ceasing to drag people into the criminal justice system for getting high is justification enough for legalization. But when I read the paper by João Castel-Branco Goulão, the architect of the Portuguese decriminalization regime, I start to wonder if decriminalization would have been a better path to take. I’d be interested in your thoughts on this.

McIntosh: As we have agreed, the issue of the age at which we should allow young people to use marijuana is now at the forefront of the legalization discussion. This is because it is somehow assumed that adolescents under the legal age won’t use marijuana, yet this is demonstrably not the case. In my view, the only function that legal age of use performs is that it allows the government to charge an individual with selling pot to a minor. This has relatively little effect on usage. Sixteen-year-olds can use tobacco or alcohol with impunity. But the age of consent is a very sensitive issue politically so there will not be much support for what Weinstock is proposing. However, to answer your question, I think legalization is preferable to decriminalization. This was the position of the Le Dain commission which I found to be very compelling.3 Legalization potentially gives the government a much larger role in the system of marijuana ­regulation and control—more than simple decriminalization would. Decriminalization does nothing to promote product quality, and drug profits are not taxed or appropriated by the state.

Here’s another issue. One of the recommendations of the task force that preceded the new legislation was that individuals would be allowed to grow their own marijuana, subject to limits on plant size and numbers. In the final rollout of the legislation, it was decided to allow the provinces to make a decision on whether this was a legal option. Some provinces like Quebec have decided not to allow this. I was hopeful that Canada as a whole would do so. Now that possessing small amounts of marijuana is legal, it is going to be very hard to enforce this type of restriction. Making home production illegal is a throwback to the old ways of dealing with marijuana, requiring the police to waste a lot of time and effort on activities that have no social benefit and that clog up the legal system with trivial offences. It also runs counter to the original purpose of legalization, which was to remove the control of marijuana use from the criminal justice system. Alternatively, provinces could decide not to enforce the law, which has the effect of undermining the legal system and defeats the purpose of the restriction.

Perhaps, more importantly, home growing is another way of reducing the role that the black market plays in marijuana production and distribution. I noticed that this issue was not addressed in any of the book’s essays, including the paper by Anindya Sen and Rosalie Wyonch covering black market problems, which I’d like to come back to. But first, there must have been some discussion of production and distribution by some of the contributors?

Potter: You’re right, the homegrown aspect of the legislation doesn’t get a lot of attention in the book, and didn’t get much discussion at our conference. I’m not sure why—maybe because it is seen by most academics as a sort of niche thing, for hobbyists and other pot devotees, and that won’t put much of a dent in the black market, one way or another. To the extent that it does get discussed, it is wrapped up in the more general question of the federal-provincial wrangling. Quebec’s attempt to completely ban home-growing of marijuana, in particular, has raised some serious jurisdictional questions that have not entirely been resolved.

But this does point us to one last topic I’d like to touch on, and that’s the patchwork of distribution systems that have been put in place across the country. To be honest, I find the way things have gone is pretty appalling. With the possible exception of Alberta, it’s been a total gong show, with a supply shortage and the lack of adequate retail outlets leading to a situation that is not measurably different today than it was before legalization. The old dispensaries and online distribution networks are still in place and still outperforming the legal market by virtually every measure. Furthermore, not only was this completely predictable—it was predicted, including by some contributors to our book.

My own preference would have been to simply legalize the black market—bring the dealers and dispensaries in from the cold, as it were. They’ve got the outlets, the distribution networks, the product, the customer base—setting up a parallel system always struck me about as misguided as the Americans setting up a parallel government in Iraq in 2003, while leaving the members of the former regime with no option but to work for the insurgency.

But in your March 2017 contribution to the LRC, you offered an alternative proposal, which was to set up a pan-Canadian cannabis marketing board that would serve as a single-desk buyer and seller, with product being distributed through pharmacies. This would have made it easier to control supply, quality, and price, while firmly integrating the whole regime into the healthcare system. Instead, we went the usual Canadian route and left everything to the provinces.

Do you have any sense of why that decision was made? Was it an abdication of federal responsibility, or because the jurisdictional question was too complicated? Would it have made much of a difference, in the end? It is interesting that this option never really came up in any of our contributions.

McIntosh: The pharmacy model was proposed by the Uruguayans as a distribution model. It impressed me because it offered a vehicle in which all types of marijuana could be delivered to the market from a single outlet. Pharmacies sell all kinds of drugs, some of which require a prescription while others are suitable as over-the-counter products. Marijuana fits into this model well; in addition, pharmacies are located in most Canadian localities and are regulated provincially so the model has many attractions. The absence of a central oversight institution, which would have set limits on THC content, defined the characteristics of edibles, etc., was disappointing to me, since it left a lot of things out of a unified control mechanism if the provinces were not inclined to deal with them. Additional federal involvement with the collaboration of the provinces could have led to the development of educational programs directed toward young people. Getting Canadian youth off marijuana was a major justification of legalization, but, so far, no progress seems to have been made on this front.

You could argue that the federal government decided to devolve the delivery system to the provinces because they could duck the responsibility for the failures and glitches that will inevitably occur as managing marijuana production and distribution evolves. As Malcolm Bird notes in his essay on politics and policy, the political rewards favour the federal government as the initiators of legalization, which was and still is popular with the electorate, at the expense of the provinces who have to deal with the details of implementation and bear the costs of the conflicts that arise between provincial and municipal requirements. Unfortunately, what is good for the Liberal government electorally does not always lead to good policy.

There are two other issues that I want to mention, before I get your assessment of how well the legalization program has worked. Sen and Wyonch examine the Toronto market and investigate the role that the black market plays in it. They come to the conclusion that, at least in Ontario, the black market is an important source of high-quality products and is likely to remain in this position.

I think this conclusion is premature. The marijuana market five years from now will be very different from what it is today. Aphria, a Canadian producer of marijuana products, said in July 2017 that it was producing medical-grade marijuana for $1.11 a gram. Jonathan Caulkins, one of the leading experts on marijuana legislation, predicted the long-run cost of marijuana would be between $7 and $10 a pound or 1.65 to 2.2 cents a gram.4 The present retail price of recreational marijuana in government stores in Montreal is around $7.50 a gram. When government agencies start buying from large low-cost producers, the retail price can be reduced. My prediction is that, in the long run, the recreational marijuana market will resemble the market for alcoholic beverages. For Quebec, and possibly other provinces, there will be enough outlets, there will be lots of different products that are clearly labelled and, like wine, will come from all over the world. Prices will be reasonable and, again like wine or spirits, it won’t be worthwhile for black market producers to enter the market.

So, finally, Andrew, what’s your assessment of how well the legalization experiment has ­performed so far and what we can expect as it unfolds?

Potter: I don’t think anyone thinks things have gone well at the retail level. But perhaps that was, if not inevitable, certainly a very likely result. It was always going to be messy, given how many moving parts there are here. But more damning, I think, is that the government moved far too slowly on the issue of pardons or expungement. In my view, a parallel bill dealing with expungement should have been in place on Oct. 17, 2018, and the commitment to fast-tracking the pardon process is inadequate, to put it very mildly.

One thing that should be fascinating to watch is what happens when the first charges for driving under the influence come to court and the techniques that police are using for testing drivers are challenged. Then there are the saliva-testing devices, which are themselves relatively new and will almost certainly be subject to a court challenge here. But all of this, I think, will get sorted out in due course. I also think that the retail problems will sort themselves out sooner or later, depending on the province, though I have no clue what effect it will have on the black market.

Here’s the real issue: What comes next? Marijuana was never really the gateway to harder drugs that conservatives said it was, but I have a suspicion that marijuana legalization will turn out to have been a legal gateway to calling the entire drug-prohibition regime into question. How soon before we are talking about taking a full harm-reduction approach to opioids and other
hard drugs?