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Cannabis Marijuana is finally legal. What happens next is anyone’s guess

In this file photo taken on April 20, 2018, smoke lingers over Parliament Hill as people smoke marijuana during the annual 4/20 rally on Parliament Hill in Ottawa, Ont.

LARS HAGBERG

So it’s over now, the long and revealing walk up to the legalization of recreational cannabis in Canada.

It lasted 95 years, if you date the journey from when cannabis was banned in Canada in 1923 in a bout of anti-immigrant nativism; 50-plus years, if you start with the use of marijuana as a symbol of anti-establishment protest in the 1960s and seventies; 17-ish years, if the court challenges that established Canadians’ right to medical marijuana are where you choose to begin marking.

The precision is reassuring. Because, despite weeks of public declarations by politicians and licensed producers, no one knows for sure what’s going to happen next.

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Will the black market disappear? Apparently not, especially as ingestibles and concentrates and vape pens, which may account for a third of the industry’s sales to date, won’t be legal for another year.

Will the black market undercut the price of legal cannabis, reducing the already slimmer-than-expected margins of licensed producers, thereby crushing the irrationally soaring stocks of those producers, which have made a lot of people rich in the past two years? Possible. Probably inevitable.

Will the police enforce the new legal regime by cracking down harder on thousands of unlicensed producers? The big producers hope so, having declared the black market their mortal enemy – although not before scouring its ranks for growers and technicians.

Cpl. Richard Nowak demonstrates existing cannabis testing techniques on communications manager Fraser Logan in Edmonton on Oct. 12, 2018.

AMBER BRACKEN

Will vast weed factories such as Aurora Cannabis Inc. and Canopy Growth Corp. produce pot anywhere near as good as that of the small craft growers who established the legendary reputation of, say, British Columbia’s finest quad? The jury is out, but there have been disturbing reports – one in this newspaper last Saturday by law professor Alan Young – about the unsmokable flake some of the biggest licensed producers are pushing.

Will stoned drivers wreak havoc on the highways? And will law-enforcement officers be able to tell they’re high, given the difficulty of measuring cannabis impairment? Hard to know. But in the past few years, 40 per cent of the people killed in car accidents have tested positive for drugs, half of them for cannabis (although 30 times as many people were charged last year for drinking and driving as were hauled in for operating a vehicle while high.)

We don’t even know for sure how big the domestic market for legal cannabis will be. Last spring, in the prelegal frenzy, the accounting firm Deloitte predicted the cannabis market in Canada could be worth $22.6-billion a year.

Roughly 16 per cent of the population older than 15 consumes about 690 tonnes of grass a year – $5.8-billion worth, by one estimate. And 28 per cent of those users say they’ll consume more now that it’s legal. But Canadians still spend more on shoes. Users would have to smoke twice as much to reach half the Deloitte estimate.

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An employee at a smoking lounge in Toronto exhaling cannabis vapor on Oct. 6, 2018.

CHRIS DONOVAN

Chris Savoie smokes marijuana during the 'Emergency Meeting for the Toronto Cannabis Industry' put on by the Cannabis Friendly Business Association at the Hot Box Cafe in Toronto on May 17, 2016.

Mark Blinch

Of course, that was in the prelegal, Wild West days – back in, er, February. Back then, Before Legalization, anti-pot stigma was still thriving. All but one chartered Canadian bank publicly refused to lend money to cannabis companies. Nine out of 10 doctors wouldn’t prescribe it. Seven per cent of the country disapproved entirely – still does. Until Wednesday, when the Cannabis Act became fact, cannabis was still for many a go-to signifier of skank.

But as of Wednesday, cannabis is the status quo – and for good reason. Illegal recreational cannabis was a disaster. Two million people were arrested for growing and selling pot in Canada – 6 per cent of the population. Some 59,000 were arrested for possession as recently as 2013. The majority were anything but major criminals. The governments of the United States and Canada spent more than US$800-billion fighting a pointless war on drugs, jailing millions. No one will miss that in Canada. (It’s still going on, to a lesser degree, in the United States.)

And yet, for all the changes legalization may bring – safer weed, stable demand, the notching of Canada as a world leader, the (gradual) elimination of the black market, much-needed research to back up 5,000 years of anecdotal evidence of cannabis’s value as medicine – it may be the loss of its role as a symbol of disruption, as the embodiment of a non-traditional way of doing things, that the cannabis industry ends up missing most. Not that legal weed will stop anyone from thinking that way. But when recreational marijuana was illegal, people were forced to ask themselves why they wanted it. There were a lot of different answers. Some of them were quite revealing.


Trevor Pott will be holding a party to celebrate cannabis being legal, in Edmonton, Alta., on Oct. 16, 2018.

JASON FRANSON

In January, as part of a long-term assignment to cover the rapidly changing culture of marijuana, I started to attend monthly meetings of a cannabis accelerator called Leaf Forward. The Leaf meetups were the brainchild of people barely out of childhood themselves: Brett Chang, 26, Alex Blumenstein, 28, and Taylor Scollon, 28.

Leaf met once a month on the eighth floor of a downtown Toronto low-rise. A good night attracted 100 people. The mood was upbeat, even manic. Leaf’s intent was “to open space for the small producer and operator.”

The first entrepreneur I met was a 23-year-old woman named Antuanette Gomez, who claimed to own the intellectual property rights to the name “Cannalube.” It was a weed-infused vaginal lubricant she made on her own and sold in pop-up shops. There were equally brilliant entrepreneurs at the Leaf meeting, but Antuanette seemed to capture the spirit of the prelegal frenzy: This is everything you hoped it would be, the spirit said, and then some. The lube relieved the pain of menstruation and endometriosis and improved sexual response. She claimed to have been offered $200,000 for the rights to the name alone. (I met her a few weeks later, and the offer had risen to $750,000.) She said the lubricant was “98-per-cent effective.” I kept trying not to think about what that meant. Not that it was a bad idea: Tweed Marijuana, one of the largest cannabis producers in the country, now makes its own lube, called Foria. “Basically it’s the only option a woman has if she has sexual problems,” a Tweed executive told me a few weeks ago. “Does it work?” I asked. We were almost whispering to one another. “Clinically, scientifically, no,” the executive said. “But observationally, yes.”

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The same night I met Antuanette, a 26-year-old stock analyst named Aaron Salz – one of the sector’s most important dealmakers – was interviewed on the Leaf stage. “The first problem," he said, "is no one knows how to value these companies.”

Problem No. 2 is “almost nothing you hear is true.”

The third problem, he said, is whether anyone can actually grow quality weed at the volumes required to be profitable.

That was the prelegal cannabis space. It looks remarkably like the postlegal cannabis space.

A booth promoting vape products are photographed at the O'Cannabiz Conference & Expo in Toronto on June 8, 2018.

Christopher Katsarov


If you read the business section of your newspaper or watched the news on TV, the prelegal cannabis industry resembled a vast watery plain ruled by massive and aggressive tyrannosaurs – large licensed producers buying countless smaller startups, which drove market capitalizations skyward. But whenever you hung around actual people working in the actual cannabis industry, that scene was nowhere to be found.

In Surrey, B.C., I met a group of people who ran Eteros, a startup that designs and manufactures the Mobius trimmer. Trimmers are machines that clip twigs and leaves from buds of cannabis. Some craft growers still do it by hand and maintain this enhances their product. (Large producers such as Canopy dismiss this as sentimental claptrap.) Aaron McKellar, a former boat builder, was one of the designers of the Keirton trimmer, the most widely used machine in the industry, until he sold his stake and started Mobius. It’s a surprisingly gripping topic, trimming.

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The Mobius is gorgeous. It looks like a cyclone of push-mower blades set on a pert jet engine. It sells for just more than $30,000, retail. The team that designed it has four patents pending. It can trim 55 kilograms an hour wet and 20 an hour dry (don’t even ask); a hand trimmer can do half a kilo an hour, if he’s superfast. The largest licensed producers in Canada might run 10 of these babies. When I met the Eteros team, they’d made 13, all by hand, and were turning out one a week. They’ve since upped this to four a week and are aiming for one a day. I thought they’d be a bunch of ex-hippies, but they were in fact straitlaced engineers in their 20s and 30s. “None of us are in the industry for the cannabis,” one of them told me. “It’s for the mechanical-engineering challenge.”

I found their seriousness surprising, even moving. They reminded me of monks, and for a while I couldn’t stop thinking about them. Eventually I figured out why: The way the legal Canadian cannabis industry has been shaped and promoted, emphasizing government restrictions and stock-touting promoters, we rarely hear about the individuals who created the industry at its most granular level. Maybe this will now change.


Cannabis harvesting machines are seen at the Twister by Keirton Inc. booth at the Lift Cannabis Expo in Vancouver, B.C., on Jan. 14, 2018.

DARRYL DYCK

One thing the industry has definitely figured out in the run-up to legalization is how to make it easy for people to desire, buy and smoke weed. Lift and Leafly began life as the Yelps of cannabis, reviewing strains online. As of today, they’re vast clearinghouses of legal-cannabis-related information. Lift, the Canadian version, went public last summer, raising $10-million.

Leafly’s website is one of the most efficient on the internet. You can choose the weed-modified mood you seek on the Moods and Activities page of the site. If you pick “Stay Productive," for instance – and why would you not? – Leafly will find not just a dozen appropriate cultivars of weed but where you can buy the strain in your neighbourhood.

Whether the weed actually keeps you productive is beside the point. As Ernest Hemingway said of the Daily Racing Form, weed reviews are an example of the “purest form of fiction there is.” Here is the opening of a review of a Stay Productive strain of cannabis known as Allen Wrench, by a writer named Stuka Fox. “Don’t just snap off a bud and cram it in your pipe, you f­­------ Philistine! No, stop and admire. Breathe in the chemically scent.” (Grammar has never been Leafly’s strong suit.) “Give it the ol’ pinch-test for density. THEN cram it in your pipe and smoke it." What gave the best prelegal weed reviews their energy was their illegal, non-conforming status. After legalization, who knows? The fear is that cannabis ratings will start to read like wine columns.


What is changing already with the legalization of recreational marijuana is medical research. With pot no longer a Schedule 1 restricted drug, long-awaited clinical trials are becoming easier to arrange. In the past month alone, the U.S. Drug Enforcement Administration has approved both the importation of a cannabinoid capsule manufactured by Nanaimo-based licensed producer Tilray Inc., for use in a University of California at San Diego clinical trial of a treatment for essential tremor, and the use of cannabis-based Epidiolex, made by British firm GW Pharmaceuticals, to treat a rare form of epilepsy. Last week, Canopy shipped cannabis to a U.S. research partner with the DEA’s okay. Co-CEO Bruce Linton thinks Canada’s 350,000-odd medical marijuana patients are a base from which sped-up medical trials can now be conducted. “I don’t think it’s a long process now to be able to say: This concoction delivered this way gives an adult male up to seven hours of this type of sleep,” he told me recently. Nor does he think legalization per se will diminish our frenzied interest in cannabis. He challenges investors “to find any other topic that has been as durable in the media over time and frequency as this.”

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But an even more widespread candour may be in the works.

Recreational cannabis will become legal in Canada on Oct. 17, 2018.

HO/Aphria

For all its legitimacy, the Canadian medical marijuana system has always served as legal cover for recreational users. In 2002, the year after medical marijuana became legal, 455 patients were registered to use it. As of this year, 341,084 Canadians are “licensed.” That’s a 750-fold increase. The population, meanwhile, has increased 22 per cent in that time. This isn’t to suggest there aren’t legitimate medical patients who need and deserve cannabis. But there aren’t 341,084 of them. As of today, no one needs to pretend to be a medical patient any more to buy cannabis.

That raises the question of whether recreational use can also be understood in a more intelligent way. The days of the 25-year-old male stoner in a black Supreme stocking cap inhaling his way to oblivion on a greasy bong may be ending as the standard bearer for recreational cannabis.

Danielle Jackson, a.k.a. MizD, is a well-known Vancouver authority on cannabis. She’s 53. She started using pot at 12, the year she ran away from home in Nanaimo for Vancouver. She lived on the streets for four years until she had her first child. “When I started using cannabis, you were automatically a criminal," she told me last March in her 1960s-style apartment in North Vancouver. "And you had to consort with criminals.” Today, she’s so moved by the fact cannabis has been legalized, she is close to tears. “That whole lifelong habit of always looking behind you, it’s just gone,” she said. “It’s just so normalized.”

Since 2004 she has made her living as a “cannatherapy consultant," advising large licensed producers and individual clients alike on everything from edibles to how to reach older cannabis users. The latter are of great interest to Ms. Jackson. “It’s the fastest-growing demographic in cannabis culture,” she claimed. A recent study at New York University found that between 2013 and 2016, use of cannabis doubled among people over 65. “And why not?” Ms. Jackson added. “Cannabis is the closest thing we have to a fountain of youth.”

Her clients range in age from 45 to 92. The No. 1 question they ask is, “What does it feel like to be high?” Cannabis has been proven to help rosacea, anorexia, PTSD, some pain, possibly tremors and chemotherapy-induced nausea, to cite just the scientifically supported claims. But mostly what it is good for, Ms. Jackson tells her clients, is that “it has a wonderful ability to create authenticity. One of the great things as we get older is we age. Cannabis really enhances our ability to experience joy.”

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That desire isn’t limited to the elderly. “The only difference between medical and recreational use,” Ms. Jackson explained that afternoon in North Vancouver, “is the intention with which it’s consumed. The cannabis is the same. And even that stoner, the cellar dweller playing video games, even he is using it as a therapeutic drug.” If the legalization of recreational cannabis manages to deepen our empathy for who uses it, and why, the wait for legality will have been worth it.

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