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One Licensed Producer Shares Insight On When Canada Will Legalize And What It Could Be Like

Curious about where marijuana will be sold in Canada and how much it will cost? Prime Minister Justin Trudeau has been tight-lipped about regulations, but Denis Arsenault - CEO of OrganiGram, a licensed medical marijuana producer located in Moncton, New Brunswick - has an idea of what the recreational marijuana market might look like.

Here's his expert opinion on what might be in store for the future of marijuana in Canada.

When will we legalize?

As soon as August 25, 2016, according to Arsenault. Right now, the government has been ordered by federal court to revise the country's medical marijuana laws so that patients can legally grow their medicine at home. "They could use the timeframe of the Allard decision for one complete roll out for legalization," Arsenault notes.

Where will marijuana be sold?

There's been a lot of speculation that provincially owned liquor stores would control the recreational marijuana market. Arsenault likes the idea of the liquor boards overseeing the regulatory regime, but he's not sold on stocking strains next to spirits.

"I'm 100 percent in agreement that it should be managed as a program by the individual liquor control boards. However, the term 'managed distribution' could take many forms. Is it sold in a liquor store? Is it store by a store licensed by the liquor control board? We [the country] need to have this dialog."

Arsenault's also concerned about how it's sold. He stresses that offering the best customer experience is essential to eliminating the black market and maximizing revenue. That means offering a wide variety of products at affordable prices and in accessible locations. "There's no doubt that you cannot...sell only four strains of marijuana in the corner of a liquor store and priced at twice the rate of the black market," he said.

What will the tax rate be?

Low, Arsenault thinks, if the government hopes to beat the black market. "It isn't something that should be taxed too highly to begin. They can increase those taxes over time as the black market disappears."

And that advice applies to setting prices too. Arsenault's advice to Trudeau is, "When you're putting together the legislation, be cognizant of the fact that you have a competitor out there that has incentives to adapt. Be cognizant of that when putting together taxation, regulation and experience together. That will make for a successful program."

What will happen to the illegal dispensaries?

One reason Arsenault wants to see the Liberals legalize marijuana sooner than later is that the new laws "would resolve the issue of dispensaries buying marijuana from God knows where and selling it to patients."

He's referring to the "gray market" dispensaries that are selling marijuana across Canada. According to the nation's current cannabis laws, the only legal way for patients to buy marijuana is through a mail-order system with OrganiGram and other licensed producers. So the storefronts are illegal, and their product is not officially regulated.

But even though the dispensaries and LP's are rivals, Arsenault is okay with letting them have a piece of the legal market as long as they're regulated: "I'm not opposed to the dispensaries being part of the legal framework moving forward. But they must acquire marijuana from legal sources." Which could include the LP's.

And Arsenault says the dispensaries will also have to comply with other regulations for the sake of public safety. "Marijuana is not bread, where anyone can bake it, open a shop and sell it. Alcohol is not bread. A casino is not bread."

What about the mail-order system?

Arsenault says the mail-order system is here to stay. In fact, he thinks it's essential to combat the black market and offer the best customer experience.

"We are a very, very large country," Arsenault explained. "If you put the mail-order system in place on day one [of recreational sales], you have product distribution in every corner of the country." In contrast, setting up retailers across the country would likely take time, and the black market could exploit those gaps in the market.

He also thinks that the mail-order system will appeal to people who don't want to be seen buying marijuana. "Even though it will be legal in a year, it's still a product that will have a stigma attached to it for many years. If you leave the mail-order system, it allows the consumer to remain anonymous while trying something that might be legal but still has a social stigma. Your local pastor won't want to be seen at the marijuana counter of the local liquor store."

But even when the stigma fades, Arsenault thinks mail-order will stay in business for people living in remote areas (where retailers might be far away) and for the working world.

"There's a reason why Amazon has taken over the world: it's called convenience. People are busy these days. They might not have time or energy to drive across town to the dispensary after work. It takes two or three minutes to place your order [online] and it shows up the next day."

Maybe they'll gift wrap strains for special occasions too.

h/t Georgia Straight


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