Legal Vs Illegal Cannabis In Canada: Your Guide To Adult-Use Legalization

The governments objective of displacing the black market with adult-use cannabis legalization is making strides with many brick and mortar illegal dispensaries now gone. Unfortunately, the flow of black-market product through online channels is still going strong. Often people ask me, how can I tell what is legal vs. illegal? Many black-market products have sophisticated websites and packaging, and often the companies claim to be legal that are not. So how does one detect illegal products/sites, and how do you purchase legal cannabis? Your guide to the new adult-use market in Canada:

PRODUCT TYPES

With adult-use legalization many people think that all the product types that were available on the black market were made available through legal channels and that is not the case. The government started slowly with only two product categories – flower (or bud) and oil. Cannabis oil is typically ingestible with a bottle dropper or spray, but it can be branched off into a couple other categories such as capsules containing oil, or topical oil intended for use on the skin. Recently new product classeswere announced for late 2019 which include edibles, concentrates and topicals. The new regulations with these products are coming into force no later than October 17, 2019 in an effort to displace the black market where all types of products are available. There will be restrictions, mainly on the milligram content per serving. So, if you happen upon a website that is selling 100mg THC gummy bears, you can be sure that is a black-market product. Animal products such as CBD dog treats are not allowed for the foreseeable future. There was a large market for these types of products illegally. Health Canada’s stance is that there is not enough information and research to allow products of this nature at this time.

PACKAGING

Packaging is the biggest giveaway if a product is legal vs. illegal. In the adult-use market, plain packaging that is regulated by the government is all that is allowed.All legal cannabis products will have a “Excise Tax” stamp that will be covering the opening of any package cannabis is sold in.Some Licensed Producers under the previous ACMPR (i.e. medical) regulations have been given 6 months post legalization to use up their old packaging, however this product will still have an excise stamp indicating it is legally sourced. After this grace period expires on April 17, 2019, all cannabis packaging will be plain packaging, this includes warning labels, small brand elements, restricted font size, a universal cannabis symbol (which is a stop sign with a marijuana leaf and the word “THC”, even if the product only contains CBD) as well as other mandatory information. The packaging also must be opaque, dose-controlled and child resistant, with no glossy finish, metallics or embossing. No imagery of cartoons, people or cannabis is permitted.

RETAIL BY PROVINCE

Retail stores are not available in every province across the country, but online stores are available to Canadians which are typically government ran. It is important to note that every province has their own regulations, so you are only able to purchase within the province that you are a primary resident of.  Your selection is dependant on what supply deals the provincial commissions have set up with Licensed Producers or what licenses were handed out in your province. Other differences are tax structure and shipping costs.

Alberta

Distributed by the Alberta government through https://albertacannabis.org/, you can buy flower, oil, capsules and pre-rolls directly and have it shipped with a $10 flat rate shipping fee. Brick & mortar stores are privately operated but their supply solely must be purchased through the provincial government.  There are approximately 75 stores open across Alberta today with many more in the queue. Licensing has come to a halt until the supply has stabilized, so don’t expect any new retail outlets to open anytime soon.

Legal Age: 18
Tax: 5% (included in sale price)

British Columbia

In British Columbia, the Liquor Distribution Branch will be the only distributor of adult-use cannabis. On the retail side, there will be a mix of private and government-run stores, with the government solely running the online platform. Their online store https://www.bccannabisstores.com/has an array of products from flower to oil, sprays, capsules, as well as accessories and a flat shipping rate of $8.For BC residents this is essentially the only option to purchase legal cannabis as only 2 storefronts have gotten proper approval and licensing. This may be surprising as not toolong-ago Vancouver had dispensaries on every street corner. Since legalization, many have shut their doors and those that haven’t complied faced a ruling from the B.C. Supreme Court in December that states all illicit cannabis dispensaries operating in Vancouver to close their doors or face penalties.

Legal Age: 19
Tax: 12% (on top of sale price)

Manitoba

Private retailers are licensed by the Liquor, Gaming & Cannabis Authority of Manitoba to sell via their website or a storefront. There are only a select few licensed in Manitoba making selection scarce. Product selection and shipping varies from retailer to retailer, a listing can be found at https://lgcamb.ca/cannabis/store-list/

Legal Age: 19
Tax: 5% (on top of sale price)

New Brunswick

The only legal retailerin the province is the New Brunswick government who run both the storefronts and online store. There is an abundance of stores (20 to be exact) and customers are promised a one-day turnaround when ordering online. The shipping is a $7 flat rate and all orders will be delivered by Canada Post. The government website includes educational content, even a section on how to roll a joint if it’s been awhile. https://www.cannabis-nb.com/

Legal Age: 19
Tax: 15% (included in sale price)

Newfoundland & Labrador

The Newfoundland Labrador Liquor Corporation (NLC) is the exclusive online retailer of cannabis in the province https://shopcannabisnl.com/. They oversee licensing retailers across the province for storefronts which primarily are Loblaws or Tweed owned. Unlike many of the other government run online stores, the suppliers ship directly to the consumer without going through a distribution hub. Among the range of products available, they also sell plants for personal home growing.

Legal Age: 19
Tax: 15% (on top of sale price)

Northwest Territories

The Northwest Territories Liquor Commission oversees all cannabis in the province, providing an online store where it is shipped directly to the consumer from Ontario. Shipping costs vary by area. It also is sold through 5 liquor stores across the territory, but there will be an opportunity for entrepreneurs to apply for a license to open private stores. https://www.ntlcc.ca/

Legal Age: 19
Tax: 5% (on top of sale price)

Nova Scotia

Sold through the Nova Scotia Liquor Commission (NSLC) via online channels and stores (all except one are paired with liquor stores). A range of product is available from seeds to flower. One major difference from other provinces is that in order to purchase online, the consumer must go in person to an NSLC store to verify age and obtain an access code. https://www.mynslc.com/en/CannabisInfo

Legal Age: 19
Tax: 15% (included in sale price)

Nunavut

Available for purchase online through the Nunavut Liquor & Cannabis Commission https://www.nulc.ca/ or one of the agents approved by the government. At this time, they have a deal with Canopy Growth (Tweed) to supply cannabis.

Legal Age: 19
Tax: 5% (on top of sale price)

Ontario

Currently, the only way to purchase legal recreational cannabis in Ontario is through the government ran online Ontario Cannabis Store https://ocs.ca/. Coming in 2019 are the privately-owned retail stores which were chosen through a lottery system. The initial lottery has chosen 25 winners, who have until mid-January to submit a Retail Operator Licence Application. The province is expecting the 25 stores to be ready for an April 1st opening date and are planning on applying a $25,000 fine to those who can’t get their stores open by the end of April.

Legal Age: 19
Tax: 13% (included in sale price)

Prince Edward Island

A government corporation oversees four retail locations as well as the online shop. Brick and mortar store locations were chosen based on population and plan to expand if required.https://peicannabiscorp.com/

Legal Age: 19
Tax: 5% (on top of sale price)

Quebec

The SQDC is the cannabis division of the government-run liquor commission in Quebec that is overseeing cannabis sales. They have approximately 15 stores across the province with more to come later this year. The store experience may be unlike other provinces where SQDC employees cannot encourage or promote the use of the products, in fact, they have to provide information about the risks of cannabis use. This branch also operates the e-commerce platform: https://www.sqdc.ca/en-CA/. Quebec is in the midst of some rule changes around cannabis, most notably the legal age for consumption is changing from 19 to 21 making it the highest in Canada.

Legal Age: 21
Tax: 14.975% (on top of sale price)

Saskatchewan

This province probably has the most entrepreneur-friendly regulations due to the fact there is no provincial distributor “middle-man”. Private retailers are licensed by the province and allowed to sell directly to consumer via their websites or stores. A list of permitted retailers can be found on the Saskatchewan Liquor and Gaming Authority (SLGA) website https://www.slga.com/permits-and-licences/cannabis-permits/cannabis-retailing/cannabis-retailers-in-saskatchewan .

Legal Age: 19
Tax: 11% (on top of sale price)

Yukon

The Yukon Liquor Corporation (YLC) is the sole distributor/retailer of non-medical cannabis in the territory. Consumers will be able to purchase through the online platform or through the store located in Whitehorse. The government intends on establishing a licensing board and opening up applications for private retail stores sometime in 2019. https://cannabisyukon.org/

Legal Age: 19
Tax: 5% (included in sale price)

Why Purchase Legally?

If an individual is used to purchasing from the black market, making the switch to “go legal” may hurt the pocketbook with prices nearly double per gram. This is not only due to taxing, but a lack of supply is driving price up. With more Licenced Producers coming online, the price is expected to drop in the next year. Inventory shortages aren’t the only frustrating thing for consumers, but also the service disruptions due to a Canada Post strike that happened right as legalization approached. With some of these downfalls to the legal industry, why make the switch? First and foremost: safety. The strict regulations ensure you know exactly what the product is. That goes from ensuring it is free from heavy metals, harmful pesticides, to knowing exactly how much THC is in it. It truly is lab tested, while many black-market products claim to be there is no way to know for sure. As a new consumer, regulated channels provide better product usage guidance and education from professionals. Licenced Producers are not allowed to make claims about products unless substantiated by research. Buying from the regulated market actualizes tax dollars and reduces money going into the black market which has all the ancillary crime that goes with it. Not only that, but it prevents cannabis from getting into the hands of children which was the original intention of legalization. The regulated industry brings about jobs and new business opportunities for entrepreneurs. If this is a success, Canada will lead the world in this industry.

The Clamp Down On The Black Market

Many Canadians are unaware of the stiff penalties that come with illegal cannabis post-legalization. For possessing illegal cannabis, the worst possible penalty is 5 years. If caught selling illegal cannabis or providing to youth, the penalties are up to 14 years in jail. While the punishment may not seem to fit the crime, the stiff penalties are an attempt to stamp out the black market. With that said, there has been little action on part of the government on actually charging offenders and illicit dispensaries still exist as storefronts and online. Slowly action is being taken in Vancouver (a city that at one time had a plethora of illicit dispensaries) because of a recent court decision. A B.C. Supreme Court decision in December ordered the closing of unlicensed retail shops, so one can assume the police will intervene if shop owners don’t comply.  Montreal is creating a specialized police squad dedicated to shutting down black market operations. The effort was dedicated $1.3 million for the cause and will include 26 police officers and two administrative staff members. Enforcement of the laws will be critical to the success of legalization. With this industry being so new it will take time to encourage people to buy through regulated channels and stamp out the black market.

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