Tag: Canada

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Ontario’s Cannabis Industry Model Needs A Revamp

Written by Johnny Green on August 15, 2022. Posted in Business, Policy.

On August 5th a third-party distribution center in Ontario, Canada named Domain Logistics was subjected to a cyber attack that essentially crippled the company’s ability to deliver cannabis products to licensed retailers. Domain Logistics contracts with the provincial government in Ontario where all licensed outlets are required to purchase their cannabis from the government (Ontario Cannabis Store).

Had the cyber attack occurred in most other legal cannabis markets, it would have largely been an isolated incident and the fallout from the attack would have only affected a small percentage of cannabis businesses. However, being that every retailer must go through the Ontario Cannabis Store, and by extension, its vendors, the fallout from the cyber attack on August 5th spread across the province.

A Broken Monopoly Model

It is estimated that Ontario is home to roughly 1,333 licensed retailers. Some of the licensed outlets are part of large store chains while others are small, family-owned operations consisting of only one store. Of course, there are also cannabis companies that fall somewhere in between.

Regardless of their size, as previously mentioned in this article, every single licensed retail outlet has to go through the Ontario Cannabis Store since it has a monopoly on supplying inventory. Monopoly models rarely work, especially when the entity having the monopoly is the government and the product is cannabis which has to compete with an unregulated market.

In a monopoly cannabis model, it only takes one hiccup anywhere in the supply chain to largely bring the regulated cannabis industry in that market to a grinding halt. That is on full display in Ontario where licensed retailers received no cannabis product deliveries for roughly a week. Even with deliveries finally resuming, many retailers are still experiencing bare shelves.

The Need For Further Reform

The main lesson from this latest cyber attack in Ontario is that there need to be further reforms to help ensure that the regulated industry can effectively compete with the unregulated industry. The current model will always be vulnerable to all types of issues, not just cyber attacks, and it only takes one major issue to cause enormous damage to the regulated industry.

How many consumers and patients sought out unregulated sources for cannabis due to the halt in deliveries in Ontario? We may never know the actual number, however, it’s a safe bet that it was a considerable percentage of people that would have otherwise made their purchases from regulated sources, and that is unacceptable.

Regulated outlets have a hard enough time competing with the unregulated market being that the unregulated market requires considerably less overhead to operate. After licensing fees, facility rental fees, security costs, and everything else that goes into running a legal cannabis business regulated outlets are already at a distinct disadvantage compared to unregulated sources. Ontario keeping its current model, and the hiccups and issues that come with it, all but ensure that the unregulated market in Ontario will continue to thrive, and that’s unfortunate considering that things don’t have to be that way.

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Canada To Spend CA $200 Million Annually On Cannabis For Veterans

Written by Marguerite Arnold on August 15, 2022. Posted in Policy.

The Canadian government is reimbursing more than double the amount for veterans’ cannabis reimbursement than it did just three years ago

According to newly released data, the Canadian government is on track to spend CA $200 million this year on cannabis claims for vets. This is $50 million more than last year and double what it spent just three years ago.

While experts and advocacy groups cannot pinpoint the specific reasons for this surge in demand, there are some obvious answers. The first is full legalization. The second is increased understanding and education about the impact of cannabis on the health issues that veterans tend to face. These include PTSD and brain injuries as well as other physical ailments. The third is undoubtedly the Covid Pandemic, which has seen increased use no matter the local legality of the plant.

There is also a call for more studies to understand what veterans are using the drug to treat.

Regardless, it is a very good indicator that the United States will also see a surge in demand from the same population after full legalization. The issue of reimbursed coverage is a controversial topic everywhere.

A Brief History of Canadian Veteran Cannabis Reimbursement

The federal government of Canada began reimbursing veterans for medical cannabis in 2008. At this time, such reimbursements were extremely limited and hard to get approval for. However, the change in policy was based on court rulings that stretched back for 20 years.

In 2014, Health Canada relaxed its rules about reimbursement authorizations, but did not impose limits on either expense or amount consumed. That year, the government reimbursed 112 vets at a cost of $409,000. The next year, the number of vets increased to 600 patients, and the cost increased to $1.7 million. According to government data released last June, there are now 180,000 Canadian veterans who are part of the program, at a cost of $153 million annually. This despite a 2016 decision by the government to limit use to 3 grams a day under the program, and further to impose a cost cap of $8.50 per gram. To put this in direct comparison with the civilian population, there are now 345,000 private citizens whose private insurance covers the costs.

Implications for Other Insured Populations

There are several takeaways from this data. The first is that it is clear that cannabis is working – and that the news about its medical efficacy is spreading. The second, however, which will have implications in places like Germany and the United States, is that insurers (either government-backed or private) may not like paying the costs – but it will soon become accepted – simply because there are no alternatives.

Cannabis the wonder drug has arrived. But the question of who pays for it is still an open question that no country has answers for.

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Cannabis Purchasing Habits Continue To Shift In British Columbia

Written by Frank Schuler on August 7, 2022. Posted in Business, Policy.

British Columbia has long been home to a vibrant and robust cannabis community. People have flocked to British Columbia for cannabis tourism purposes for several decades now.

International cannabis industry and policy observers have kept a close eye on Canada, and British Columbia specifically, to gauge consumer and patient cannabis purchasing habits in the post-legalization era.

Consumers and patients have more well-established, unregulated cannabis sourcing options in British Columbia than in most other parts of the world. It was unclear leading up to the launch of adult-use legalization what percentage of people making purchases may transition to making purchases via regulated outlets.

There’s new data out regarding purchases made in 2021, and it appears that the number of people making regulated purchases is increasing. Per Global News:

More British Columbians are using cannabis since legalization, but appear to be doing so in a responsible way and getting it more often from licensed retail stores, according to a recent survey.

The 2021 B.C. Cannabis Use Survey asked just under 25,000 British Columbians about their cannabis use and found 32 per cent of adults aged 19 and older reported using cannabis at least once in the past year, an increase from 28 per cent prior to legalization. Around four per cent of people said they tried cannabis for the first time since legalization in 2018.

“Like many provinces and territories, cannabis use has gradually become more prevalent in B.C., with nonsmoking methods of use increasing in popularity,” the report states.

One thing that the report seemed to spend a lot of focus on involved whether people were consuming cannabis ‘responsibly’ or not. That is obviously a subjective measurement.

Ultimately, the report seemed to measure this by a combination of things, including DUI data, reported frequency of use by consumers, and various other data points.

The data seems to back up what many of us already know – that cannabis legalization works and the doomsday predictions by prohibitionists leading up to national legalization in Canada have proven to be unfounded.

Cannabis A “Common Treatment” For Chronic Pain Survey Finds

Written by Frank Schuler on July 26, 2022. Posted in Science.

Chronic pain is arguably the most common health condition found around the world, with an estimated one out of every 5 adults suffering from chronic pain (1.5 billion people).

It’s a condition that is often coupled with one or more other health conditions and is often the first symptom that a patient goes to their doctor for review, and unfortunately, find out that they are experiencing other health conditions that are causing the chronic pain.

Chronic pain is defined by John Hopkins Medical Center as, “longstanding pain that persists beyond the usual recovery period or occurs along with a chronic health condition, such as arthritis.”

A growing body of scientific evidence is finding that the cannabis plant can effectively treat chronic pain in a manner that is much safer compared to pharmaceutical painkillers. A new survey out of Canada echoes previous findings. Below is more information about it via a news release from NORML:

Quebec, Canada: Nearly one-third of patients living with chronic pain conditions acknowledge using cannabis for pain management, according to data published in the Canadian Journal of Pain.

Canadian investigators assessed cannabis use trends in a cohort of 1,935 chronic pain patients residing in Quebec. (Cannabis products are legal for both medical purposes and for adult use in Canada.)

Just over 30 percent of patients in the sample said that they used cannabis explicitly for purposes of pain management.

Authors identified greater cannabis prevalence among younger patients, but they reported no significant differences between men and women with respect to how likely they were to consume the substance.

“Cannabis is thus a common treatment reported in people living with CP [chronic pain],” they concluded. “Our study re-emphasizes the importance of rapidly generating evidence on the safety and effectiveness of cannabis, in addition to age-tailored education and awareness efforts among people living with CP.”

Among patients in US states where medical cannabis access is permitted, over 60 percent are qualified to use it to treat pain.

Full text of the study, “Prevalence of cannabis use for pain management in Quebec: A post-legalization estimate among generations living with chronic pain,” appears in the Canadian Journal of Pain. Additional information on cannabis and pain management is available from NORML.

Study Finds Most Likely Reasons For Canadian Medical Cannabis Use

Written by Frank Schuler on July 4, 2022. Posted in Science.

People use cannabis for a variety of reasons, including and especially wellness purposes. Whereas cannabis prohibition is a relatively new policy phenomenon, the use of cannabis for medical purposes by humans goes back many centuries.

The cannabis plant is arguably the most versatile plant on earth, possessing the ability to effectively treat a number of ailments, as proven by a growing body of research and a seemingly never-ending list of personal testimonials.

A team of researchers in Canada recently surveyed medical cannabis patients to try to determine the most common reasons for medical cannabis use. Below is more information about the researchers’ findings via a news release from NORML:

Quebec City, Canada: Canadians who consume cannabis for purposes of self-medication most frequently report doing so to address pain, anxiety, sleep disturbances, and depression, according to data published in the Journal of Cannabis Research.

Canadian researchers surveyed 489 subjects who purchased cannabis products at adult-use retailers, but who acknowledged doing so to self-medicate. Consistent with prior data, respondents were most likely to report consuming cannabis products to mitigate anxiety (70 percent), improve sleep (56 percent), alleviate pain (53 percent), and address feelings of depression (37 percent). Subjects were also likely to acknowledge using cannabis to alleviate muscle spasticity, migraine, nausea, and symptoms of post-traumatic stress.

Survey respondents typically reported using cannabis flower and selecting products dominant in THC. However, those respondents that exclusively defined their cannabis use as medical-only expressed a preference for CBD-dominant products.

In contrast with other surveys, most respondents acknowledged reporting their cannabis use to their health care professionals.

The results of another recent survey, published in the journal Complimentary Therapies in Clinical Practice, similarly determined that patients certified to use medical cannabis in the US most commonly do so to treat symptoms of pain, anxiety, post-traumatic stress, and depression. The results of yet another recent survey, conducted by Harris Polling, also found that consumers most often report consuming cannabis to reduce stress, improve sleep, and mitigate anxiety.

Separate survey data compiled in April reported that 21 percent of US Medicare recipients acknowledge consuming cannabis for therapeutic purposes, typically to address symptoms associated with chronic pain, anxiety, and depression.

Full text of the study, “A description of self-medication with cannabis among adults with legal access to cannabis in Quebec, Canada,” appears in the Journal of Cannabis Research. Additional information on the use of cannabis for chronic pain is available from NORML.

One In Five Canadian Arthritis Patients Acknowledge Using Medical Cannabis

Written by Frank Schuler on June 15, 2022. Posted in Science.

It is estimated that as many as 350 million people around the globe suffer from arthritis. Arthritis is defined as painful inflammation and stiffness of the joints.

The condition is particularly prevalent in North America. In the United States alone it is estimated that 1 out of every 4 adults suffers from arthritis to some degree, with some cases being extreme.

More and more arthritis patients are turning to the cannabis plant for relief, as demonstrated by the results of a recent study in Canada. Below is more information about it via a news release from NORML:

Toronto, Ontario: Arthritis patients frequently reported consuming cannabis for symptomatic relief, according to survey data published in the journal Clinical and Experimental Rheumatology.

A team of Canadian investigators surveyed 799 patients at eight rheumatology clinics in Ontario. (Cannabis is legal in Canada for both medical purposes and for adults.)

Just over 20 percent of those surveyed acknowledged either having consumed cannabis within the past two years or being current users of cannabis products. Compared to non-users, those who consumed cannabis were more likely to be younger and were more likely to report suffering from severe pain.

Cannabis consumers reported using it to treat pain, anxiety, and to promote sleep. Seventy-eight percent of them reported medical cannabis to be “at least somewhat effective” at mitigating their symptoms.

The study’s findings are consistent with French survey data, published in 2021, which reported that “nearly 20 percent of patients suffering from rheumatologic diseases actively consume cannabis.”

Longitudinal data published in April reported that osteoarthritis patients decrease their daily opioid intake and experience improvements in their overall quality of life following the initiation of medical cannabis therapy. Authors of the study concluded: “Our findings indicate that providing access to MC [medical cannabis], helps patients with chronic pain due to OA [osteoarthritis] reduce their levels of opioid usage in addition to improving pain and QoL [quality of life]. Furthermore, a majority of patients did not feel intoxicated or high from MC, and of those who did, only a small percentage said it interfered with their daily activities. … Our findings support the literature in that MC reduces the use of opioids for the treatment of chronic pain.”

Full text of the study, “Medical cannabis use by rheumatology patients in routine clinical care: Results from the Ontario Best Practices Research Initiative,” appears in Clinical and Experimental Rheumatology. Additional information on cannabis and rheumatoid arthritis is available from NORML.

British Columbia Decriminalizes Drugs – Is This A New Global Trend?

Written by Marguerite Arnold on June 9, 2022. Posted in Policy.

A federal exemption has allowed this Canadian province to decriminalize not only small amounts of MDMA (ecstasy) but opioids, cocaine, and methamphetamine.

History will certainly regard Canada not to mention this period of time as a forerunner in the new wave of drug legalization. First, there was cannabis. Then the discussion about other psychedelics like psilocybin began to bloom (and in multiple places). Now, British Columbia has announced that all “hard” drugs will be decriminalized in the province.

This is not a federal, but state decision. There won’t be any formal infrastructure set up. One cannot obtain any of these drugs via legal brick and mortars set up by the government to dispense the same. However, people will no longer be arrested for possessing under 2.5 grams of any of these substances.

The Federal Minister of Mental Health and Addictions, Carolyn Bennett, said that the move by the province was in line with a federal priority to curtail opioid deaths. BC had 2,224 drug overdose deaths last year. Those statistics have also gone in absolutely the wrong direction since 2016. 10,000 people have died since 2016.

This new “exemption” begins at the end of January next year and runs until January 2026, unless extended further – or – depending on results – canceled.

Loopholes and Semantics?

It is not like other countries have not tried this approach before. See Portugal and Holland – for starters. Both of these countries have had mixed results.

In Portugal, all drugs were legalized after the repressive regime of Franco ended. That said, Portuguese law has also rolled back some of these “freedoms” based on their impact on public health. Today, the country has one of the most exciting cannabis cultivation markets in Europe.

In Holland, the famous laissez-faire attitude toward soft drug use created the first modern cannabis industry in the world that was at least widely tolerated if not always enthusiastically so. This is still true today, no matter how much there also seems to be a trend to reinvent the cannabis industry domestically.

However, there is another discussion now floating about the room – starting in Mexico but also showing up in places like London if not Austria of late. Namely that this kind of petty interdiction is expensive, not to mention tends to unfairly impact certain demographics. Plus of course, has constitutional implications.

At a time when the expenses incurred by governments in the name of public health have exploded, and Pandemic-related measures have infringed on personal liberties more than they have since the last global pandemic a century ago, it may be that simple issues like decrim are par for the course in a new post Pandemic era.

Taxes And Provincial Mark-Ups Are Hindering Ontario’s Cannabis Industry

Written by Johnny Green on June 4, 2022. Posted in Business, Policy.

The main motivation behind legalizing cannabis for adult and/or medical use should always be based on it simply being the right thing to do. No one should ever be penalized for using/possessing a plant that is 114 times safer than alcohol.

With that being said, the reality of the situation is that creating a regulated industry for the purpose of generating public revenue is a driving force behind support for legalization around the globe for better or worse.

Taking the profit away from criminal enterprises and essentially re-routing it to a regulated system in which some profits benefit society is a winning political message, and if actually achieved, a great thing. However, it’s predicated on people actually making purchases from regulated sources rather than unregulated ones, and the transition is far from automatic.

Surveys and polls have consistently found that cost is a major factor for consumers and patients, which is not exactly shocking because that is basically true of any product. But unlike most products, there are a lot of unregulated options when it comes to cannabis, and in most cases, unregulated cannabis is significantly cheaper than regulated cannabis.

Various reports have been published regarding the average price for regulated and unregulated cannabis in Ontario and other parts of Canada, and while the price for regulated cannabis seems to be pretty consistent being that it can be easily tracked, the price for unregulated cannabis often seems to be inflated in my opinion.

I spend an ungodly amount of time online talking to consumers all over the world, and I have yet to find someone in Ontario that pays the prices for unregulated cannabis that are being reported for what that is worth.

It’s a safe assumption that for every extra dollar that gets added to the price of regulated cannabis a certain chunk of the consumer base then gets lost to the unregulated market. With that in mind, the fact that roughly half of the price of regulated cannabis products in Ontario is due to taxes and provincial mark-ups is obviously a problem and will always hinder the legal industry.

This is not to say that there should be no government profit at all. Regulatory oversight is not free, so there needs to be enough money to safely administer sensible industry regulations, and to some extent, put cannabis industry revenues to work helping society in various ways.

However, there needs to be a balance struck to help ensure that regulated cannabis is truly competitive with unregulated cannabis. Regulated cannabis will never be as cheap to produce as unregulated cannabis, but it needs to be close enough that consumers feel comfortable paying a little extra for a product that they know is tested and safe.

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Researchers Identify Two Main Motivating Factors Behind Unregulated Cannabis Purchases

Written by Johnny Green on May 27, 2022. Posted in Archives, Business, Policy.

Legal cannabis is spreading across the planet, and with it, purchasing freedoms for some consumers. Yet, the unregulated market still exists even where cannabis can be purchased legally. Researchers at the University of Waterloo in Ontario recently examined the factors that motivate a consumer or patient to purchase unregulated cannabis versus regulated cannabis in North America in an attempt to understand why the unregulated market still exists in Canada despite legalization, and to a lesser extent, the United States.

By human history standards, cannabis prohibition is a relatively new thing. After all, cannabis is not a new plant and humans have used it for medical and recreational purposes for centuries. It wasn’t until the last century that political forces prohibited it. Fortunately, three countries have now legalized cannabis for adult use – Uruguay, Canada, and Malta. Cannabis can be legally acquired in some form in Uruguay and Canada, and soon, Malta.

Out of the three countries, Canada has the most robust industry model. Cannabis consumers of legal age from anywhere around the planet can come to Canada and make a legal purchase through a storefront dispensary, through the mail, and/or through delivery services. Similar options have existed in the U.S. at the state level for many years. Researchers have kept a close eye on North America as the ‘cannabis experiment’ has continued to roll out, including researchers at the University of Waterloo in Ontario.

Motivating Factors

The average cannabis consumer is more sophisticated now than arguably any other time in human history, and that is largely due to the options available to them, particularly in Canada. Some consumers want to smoke cannabis flower, some want to vaporize it, and still, many others prefer smokeless forms of cannabis such as edibles and topicals.

Regulated industries boost the options for patients and consumers. I live in a legal jurisdiction, and the different types of cannabis products and consumption methods are exponentially greater now compared to when there was no regulated market With that being said, the unregulated market still exists where I live, albeit at a much lower level than before legalization.

Researchers at the University of Waterloo in Ontario looked at consumer data from 2019 and 2020. The data was compiled as part of the annual International Cannabis Policy Study. Survey data asked consumers about their purchasing habits over the past 12 months, and when they indicated that they purchased cannabis from an unregulated source they were provided a list of reasons to select from regarding what motivated the unregulated purchase.

“‘Legal sources had higher prices’ was the number-one answer in Canada in both years (35.9% in 2019, 34.6% in 2020) as well as in the United States (27.3% in 2019, 26.7% in 2020). Convenience (both ‘legal sources were less convenient’ and ‘legal stores were too far away/there are none where I live’) was high on the list as well, with the percentage of respondents who named these as reasons ranging from 10.6% to 19.8%.” researchers stated in their press release.

Sensible Regulations To Help Boost Legal Sales

On average, the cost of legal cannabis will always be greater than unregulated cannabis. A legal cannabis company has to pay ongoing licensing and compliance fees, rent on their commercial facilities, and a number of other operational costs that do not exist in the unregulated market. All of those added layers contribute to the overall cost of legal cannabis.

Speaking anecdotally, I am willing to pay extra for legal cannabis being that it is tested and regulated. However, there is a point to how much more I am willing to pay, and I assume many consumers are the same as me in that regard. Paying 10% more is reasonable, however, if legal cannabis costs 2-4 times as much as unregulated cannabis, clearly many people will choose to go the unregulated route.

The second motivating factor identified by the researchers, convenience, is much easier to address from a public policy standpoint. Boosting the ways in which consumers and patients can legally acquire cannabis helps a considerable amount. Conversely, the fewer ways people can legally acquire cannabis the more it creates opportunities for unregulated sources to fill the void and meet the demand. Jurisdictions that choose to cling to prohibition or hinder safe access do so at their own peril.

Lawmakers around the world need to do everything that they can to strike the right balance between regulating cannabis, generating public revenue, and implementing sensible regulations that help keep the cost of legal cannabis down as much as reasonably possible. Everyone needs to temper their expectations when it comes to getting rid of the unregulated market. Just as there will always be a market for unregulated alcohol, so too will there always be an unregulated market for cannabis, at least to some degree.