With Edibles Now Legal, Has Canada’s First Year of Legalization Been a Success?

Cannabis edibles are now legal to sell in Canada, exactly one year to the day that dried forms of the plant became legal for recreational purposes.

However, any law-abiding edibles enthusiast will have to be patient for a bit longer. While producers can now legally submit their proposed products to Health Canada, the approval process is expected to take two-to-three months, pushing any product launch to December at the earliest.

This cautionary approach is in-line with the Canadian government’s measured process of cannabis legalization, which has been hindered by low product availability and a strong black market.

But with edibles on the horizon, is the G7 nation’s historic marijuana experiment on the up?

Canadian cannabis

“Overall, I think it's been a mixed picture – there have been some successes and there have been some failings, and lessons that need to be learned,” said Steve Rolles, a senior policy analyst at Transform Drugs Policy Foundation.

Citing the drugs policy reform group’s new report on Canada’s legalization process, Cannabis Legalisation in Canada – One Year On, Rolles stressed how the enormous challenge of establishing a new substance market has naturally hindered its progress.

“This was always going to be a very difficult challenge,” he told Analytical Cannabis. “You're essentially setting up a multibillion-dollar market from scratch.”

A large part of that challenge was the government’s aim to reduce the criminality associated with the illegal cannabis market. But due to problems including product availability and pricing, this goal has yet to be fully met.

“If you look at the amount of the cannabis market that is now within the legal regulations, it's still, for some people, disappointingly small,” Rolles said. “Between a quarter and a third of the market has moved into the legal sphere. And I think some people would have hoped it would be more than that by now.”

According to Transform’s report, the persistence of Canada’s unregulated market can partly be blamed on the slow roll-out of retail stores in certain provinces. Alberta and New Brunswick, for example, have recorded four times the amount of legal sales per capita as British Columbia, and Ontario’s decision to allocate licenses by lottery has led to significant supply issues.

High costs have also deterred customers from parting with the black market. Based on self-reporting data from the third quarter of 2019, Statistics Canada calculated that the average cost of a gram of legal cannabis was $10.23, compared to $5.59 for illegal cannabis.

“A lot of people – if they don't have immediate access to retail stores – they're going to stay with their existing dealers. Why would they shift?” asked Rolles. “Especially given the fact that legal cannabis is more expensive than illegal cannabis.”

But despite these setbacks, Rolles says the damage that has been done to Canada’s criminal market shouldn’t be overlooked.

“In terms of getting rid of the criminal market, that hasn't happened yet,” said Rolles, “but [it] has been undermined.”

“That is 30 percent of the market that is now regulated within the government sector, and that is taxed and that is not benefiting organized crime groups. So it's progress, albeit frustratingly slow progress.”

Edibles on the shelves

To make up for this slow transition into a regulated market, many cannabis companies are banking on edibles to bring more customers to marijuana’s legal side. Others, though, have raised concerns that child safety regulations – which prohibit products from “appealing to youth” – will hamper sales.

“The regulations are not extremely precise, but I think any licensed producer in Canada knows what they’re talking about,” Cam Battley, Aurora Cannabis’ chief corporate officer, told the Edmonton Journal. “There will be no gummy bears, there will be no gummy worms, for example.”

Canadian provinces can also further control the distribution and sales of any edibles, extracts, and topicals. Quebec has already declined the chance to sell most edibles, in an effort to prevent children consuming cannabis.

“I worked as an advisor for the federal task force [charged with implementing legalization] and we actually suggested the two-phase rollout,” said Rolles, “because edibles and concentrates involve a different set of regulatory challenges.”

“I think that was wise. Regulating foods that contain drugs is not something that the Canadian government or any government has a great deal of experience with. It's quite a novel concept.”

Though not countries, certain states in the US do have experience with the impacts of a legal edibles market. In Massachusetts, for example, the number of cannabis-related calls to a poison control room more than doubled from the figure prior to legalization.

“I think some of the experiences in the US states, they probably went too far,” Rolles said. “The market for edibles in Colorado, for example, was probably too open too early, and there were problems with cannabis-infused candies that children were eating.”

“These are fairly obvious bumps in the road that I think central regulators would have avoided if they’d taken a more measured, cautious approach. But hopefully that is what Canada is doing – we’ll wait and see what happens.”

Big cannabis on the rise

Transform’s report also warns that Canada’s regulations could be aiding large cannabis corporations while penalizing smaller scale businesses, effectively creating a dominant corporate power: Big Cannabis.

Many large tobacco and alcohol businesses have already taken steps to incorporate cannabis into their products, as commercial interest in cigarettes and alcohol stagnates. Last year Altria, the world’s largest tobacco company, made a $1.8 billion investment in the Canadian cannabis producer Cronos for 45 percent of the company. 

“There has been a concern about corporate capture,” Rolles told Analytical Cannabis. “That these corporate entities, worth billions of dollars, are throwing their money around, potentially distorting the policy making process in their interest, rather than in the interest of public good and health.”

“There’s a risk of some of the problems we’ve seen with big alcohol and big tobacco potentially being repeated. That is a challenge for countries following Canada’s lead to look at.”

Despite these concerns, both Rolles and Transform are positive about Canada’s progress in its legalization process, and believe the country still stands as a good model for others to learn from.

“I feel fairly confident that the problems that have arisen are mostly short-term teething problems that will be ironed out in the coming months and years,” Rolles added.

“Legal products will tend to be better regulated in terms of contaminants, labelling, health information, potency and so on. I think that's all very positive.”