Canada embarked on a new journey in 2018 with the legalization of cannabis for adult use. In doing so, our country is truly a global leader in becoming the first G7 country in the world to make this significant policy shift and ending almost 100 years of prohibition.
There is no question Canada and its hundreds of licensed producers of cannabis, ancillary products, and entrepreneurs, trailblazers and visionaries have a running head start in the global movement toward the reform of policy around medical and recreational cannabis.
Regrettably, however, 2019 could be the year that Canada’s impressive and bold lead will begin to shrink. Without innovative policy solutions from government in the next 12 months, Canada will lose its lead and begin to fall behind other jurisdictions to the south and across oceans.
The casual observer might question my position. Some will rightfully point to Canada as the only fully legal country on the national level for medical and recreational products. Others will use the global financial hub of cannabis in Toronto and the status of Vancouver as a cultural home of cannabis as evidence in their arguments. But this does not begin to tell the full story of the race.
Canadians have watched with bemusement at the issues that have cropped up as legalization of cannabis rolled out in several U.S. states: federal prohibitions on the use of the banking system; the inability to transport products across state lines; and the patchwork of rules. This has led many to remain confident that Canada can maintain its collective head start. However, what many miss is the recently passed U.S. Farm Bill, which will allow CBD derived from hemp to be treated like an agricultural commodity, not a banned substance. This means that producers south of the border will have cannabinoid-infused products on the shelves of major U.S. retailers in the first quarter of this year.
This move may sound minor – it is only CBD – but it does open the door at the federal level in the United States to consumer-packaged goods, cosmetics, skin creams, pain reliever topicals, and drinkables to exist on the shelves of major retailers. It allows large household-name brands and others to bring cannabinoid products to the shelves of retailers long before fully legal companies in Canada can do the same and, even then, only on the shelves of cannabis stores, not major retailers.
As an example, Harvest One’s natural sleep aid – Dream Water – currently contains no cannabinoids, but our plan has always been to have a CBD formulation. As a result of the recent changes in the U.S., we now see that product being first made available south of the border rather than in our home country (despite the current formulation now being available in 30,000 stores across North America). Those supply chains and networks will be built south of the border much sooner than here in Canada.
States that allow cannabis products with THC and other active ingredients are gaining on us as well. Take a look at California, with its population and economy roughly the size of Canada’s: in that state consumer packaged goods already rule the day, allowing large companies there to sell a variety of products and, more importantly, to understand their consumers, compile market data, and explore different forms that speak to their markets. This places them well ahead of Canada when it comes to understanding who buys which products, where, how often, and other key market indicators. Canada will not begin to do the same thing until the end of 2019 at the earliest and even then, with significant restrictions on advertising, packaging, and branding.
Other Canadian cannabis companies see what we see as well. They are investing in jurisdictions across the globe, and becoming nimbler in product development, cultivation techniques, and even government advocacy internationally to push for liberal regulatory environments. Some have even become listed on American exchanges – further debunking the myth that the U.S. is closed to cannabis.
Despite all of this, we are still the envy of the cannabis world. Significant global brands are investing in our companies for our expertise and knowledge. Canadian companies are exporting knowledge and experience around the globe. But there is work to do. We as an industry have to convince the Canadian population that we can safely and responsibly produce these products, educate consumers on the safe consumption of it, and reduce the “stoner” stigma. If we can do that, then perhaps policymakers will see less risk in developing a more permissive policy regime to help keep our lead in this race.
The starting gun has been fired, and Canada is into the first turn well ahead of others just leaving the blocks. But the drum of running feet is getting louder and closer.
Will Stewart is a senior vice-president of Harvest One, a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world.