With Albany slated to legalize marijuana this week, Canadians are watching with some interest. They are also apparently shipping large quantities south, judging by some major busts at the Peace Bridge in recent weeks.
Michael Armstrong, an associate professor in Brock University’s Goodman School of Business in St. Catharines, studies pot from an operations research point of view. Armstrong said legalization was for reality reasons.
"They didn’t legalize it because cannabis is healthy for us, they legalized because trying to fight the War on Drugs had way too many negative side effects. There was more harm being done by banning it than by allowing it to be legal. So that was their logic," Armstrong said.
Are there lessons from the Canadian legalization of marijuana that could be of interest to Albany? The answer is yes.
Number one is that Canada made marijuana legal across the country, although Ontario seems lagging behind putting everything in place, particularly the stores. Armstrong said there also remains competition from long-term suppliers, what he called the Black Market.
He said those suppliers are still out there, even as legal pot competes on price and quality.
"Probably a little bit more than half of the cannabis consumed in Canada now is obtained legally. So you can look at that and say, 'Oh, on the one hand, that means the Black Market still has almost half the market.' But on the other hand, you can say, 'Well, that’s a whole lot of progress in 2 ½ years.' Two-and-a-half years ago, only about 9% of cannabis was consumed legally here and that was because of the medical cannabis system," he said.
The Ontario Cannabis Store, the government agency that handles cannabis wholesaling and online retailing, posts a current starting price of $3.57 (Canadian) per gram, including taxes.
Armstrong said there are two other big differences between Canada and the United States. Public employees in Canada can toke, although not behind the wheel. Elements of the banking system will also work with suppliers and sellers, something Washington won’t allow.
Armstrong said Canadian banks are nervous about dealing with American pot companies because Washington might not like it.
"In the United States, the biggest problem is cannabis is still illegal everywhere, even though federally it‘s just a question of whether the federal government enforces that law. What the U.S. government is doing is they say, 'Okay. If the state legalizes it, well we’ll leave the state alone, except when it crosses into federal jurisdiction.' No, we don’t want pot banking."
