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Opinion Will legalizing marijuana actually dismantle its black market?

Daniel Bear is a professor of criminal justice at the School of Social and Community Services, Humber Institute of Technology and Advanced Learning

Liberal politicians have often tried to take the right flank on issues of criminal justice in order to defend themselves against the notion that they are "soft on crime." U.S. President Bill Clinton's embrace of the drug war and mandatory minimum sentencing is an example of this, but for many in the drug policy community there was a quiet tension leading up to today's release of the report from the Task Force on Cannabis Legalization and Regulation.

Would the report ordered by Prime Minister Justin Trudeau's government propose to legalize cannabis in a manner that protected him from criticism, or would it be based on science and the notion that responsible adults should have access to cannabis in a legal framework that balances harm and personal liberty?

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After reading the report, it seems that the task-force has provided a balanced and fair set of proposals that, if implemented correctly, would provide Canadians with access to cannabis without the tremendous over-reach of regulation and punishment that could have been proposed in order to quiet dissent against this departure from 90 years of prohibition.

The details of this proposal have been catalogued already, but the real question remains: Will this set of proposals actually dismantle the black market for cannabis?

The three biggest drivers of a shift away from illicit sales will be the taxation, pricing, and ease of access to cannabis for adults.

The task-force has recommended that the government specifically consider how any taxation of cannabis will impact the goal of reducing the illicit market. Tax and regulate production or sales too much and the retail prices will be too high to compete with illicit dealers.

While the task force doesn't advise a specific tax rate, the report does acknowledge that such taxation plans should be adaptable to respond to the changing market. It encourages higher taxes on higher-potency products and recommends that revenues raised go toward administration, education, and enforcement costs.

Colorado, a state of five million people and comparable cannabis usage rates, raised more than $100-million in tax revenue last year from legal cannabis sales. When California voted to legalize cannabis in November, it included a $9.25 tax on every cultivated ounce, and a 15 per cent retail tax. Washington state slapped a 37 per cent tax on cannabis sales when it legalized the drug several years ago.

Assuming that prices stay at about $10 per gram, plus taxes similar to California's, we're looking at at a retail price of about $340 per ounce . That would be substantially higher than reported costs in recent surveys, which average around $250 per ounce of dried buds.

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Some companies are claiming they'll aim for sales at $5 per gram, a situation where you're looking at less than $200 out the door. At that price, retail stores or mail order delivery would undercut street prices, and come with purity and quality guarantees not available from illicit dealers.

But while the economic considerations may be familiar territory for any consumer in our society, the implications for accessibility are much trickier. The task force has suggested that both retail storefronts and a mail order system in line with current medical cannabis regulations should be allowed to exist with tight regulations on advertising, packaging and locations.

The question of advertising is a non-issue frankly. We don't generally allow it for tobacco products, and alcohol advertising is quite restricted, because we know from public health research that this reduces problematic use. That probably won't impact the growth of a legal market. But what about actually getting product in hand?

Here is where the flexibility proposed by the task force might undercut the goal of eliminating illicit sales. By giving municipalities and provinces power to regulate exactly how they want individuals to access cannabis, they might inadvertently create a niche for illicit sales.

Imagine if your province only allows for mail order cannabis sales and you want some cannabis before settling in to watch a sparkly suited Don Cherry pontificate on why your team isn't moving the puck well. With mail order you face the prospect of having to wait several days, so instead you find someone nearby who still sells cannabis, possibly just purchased from legal sources.

Of course, provincial buy-in to the overall system is both key and constitutionally required in this situation, but a varied system leads to gaps that might be filled by illicit sales.

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It is doubtful that we will ever see the end of illicit sales of cannabis no matter what we do. Tobacco and alcohol can still be found outside of their regulated retail environments if you know where to look, but that isn't a reason not to proceed with the proposals set forth today.

Though a legitimate concern about corporate dominance in the new market exists, and there has been no discussion of how to destigmatize individuals with previous convictions, what we have in our hands today is a well-crated and thoughtful approach to cannabis reform that we as Canadians can be proud to show the world as we take the lead towards better drug policy. Now it remains to be seen what the politicians do to the scientists' ideas.

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