Canadian Cannabis: Advantages and Drawbacks for America

By Kyle Swartz

October 15, 2018

Canada this week will officially legalize the manufacture, distribution, possession and use of cannabis. It becomes the first country to do so, which pushes Canada into the center of the cannabis universe.

What does this mean for America? As our neighbor up north opens the world’s largest pot market, there are advantages and drawbacks for the U.S.

Advantage: Trials and Research

Part of what has slowed cannabis legalization in America is a lack of information. Politicians are understandably hesitant to get behind a drug that still does not have many official research studies. If they could better understand the potential hazards, medicinal benefits and public impact of pot, then perhaps U.S. legislators would move quicker towards broader legalization.

Problem is, with cannabis remaining a Schedule 1 drug, researchers cannot easily get their hands on the substance. Hence the lack of studies. It makes for a Catch-22 situation. Politicians are wary of supporting a drug without much research, but researchers are hamstrung from accessing the drug because politicians keep it highly illegal.

Enter Canada. Scientists from that country can now easily get their hands on cannabis. So expect a flood of clinical trials in the coming years. Which should help the entire world better understand the exact chemical effects of cannabis, the social implications of legalization, and how to craft strands more precisely tailored towards specific medicinal advantages.

Drawback: Dollars Lost

One of the driving factors behind U.S. cannabis legalization, of course, has been tax revenue. States that have approved recreational laws have benefitted financially. Often at the expense of their neighbors, as consumers cross state lines to purchase pot legally.

We’re about to see a similar situation Canada. While Americans may be less likely to cross the border and sneak in cannabis, U.S. companies will pour dollars into the economy of our neighbor where they see business opportunity. It’s already begun. Both Constellation Brands and Breakthru Beverage have made hefty investments in Canadian cannabis.

Moreover, Canadian companies have already begun to trickle down south with their business. Canopy Growth, a Canadian company listed on the New York Stock Exchange, set precedent last week with the first cannabis import into America for our medicinal market.

Which means the U.S. is at risk of losing significant dollars to Canada, all while nationwide American legalization remains a faraway prospect.

Advantage: Testing Public Consumption

Canada’s nationwide legalization can stand in as a dress rehearsal for broader U.S. laws. Among the more interesting aspects of this is Canada’s liberal attitude towards public use.

Even in U.S. states that allow recreational pot, consuming it publicly is illegal. Canadians, however, can smoke and vape pot wherever smoking tobacco is permitted. While that means that places like public parks and playgrounds are not allowed, people can lawfully smoke cannabis while strolling down the sidewalk.

What will be the social impact of consumers smoking/vaping pot publicly? Will it become a non-issue, pointing towards a loosening of public-consumption laws in America? Or will blowback to this behavior help push consumption more indoors?

Canada is about to answer this question for America.

Drawback: Marketing and Underage Use

As will it help determine the extent to which companies will market cannabis towards at-risk consumer segments.

Unfortunately we can likely expect some Canadian cannabis companies to push the marketing envelope. The market is nationwide and brand new, which will make for intense competition, especially in these early days.

Following in the footsteps of tobacco and alcohol, some players in this nascent industry may explore ways to market products in a way that entices younger generations of consumers. It’s an unfortunate reality in the world of business: get them young and keep them forever. And underage users, with their minds still developing, are particularly prone to the negative side effects of cannabis.

Another startling prospect is that marketing may help push regular users of cannabis into overuse. While Canada has announced a robust public program aimed at educating people about the health risks of pot, there is only so much the country can do when the drug becomes legal. People with dependency issues or mental-health problems (or both) may not benefit from all this access — particularly if marketing implies they should increase their usage.

As with tobacco and alcohol, there is a cost to pay publicly for legal substances. It remains to be seen whether nationwide recreational laws will heighten the harm of cannabis on the lives of at-risk people.

America will surely take note.

Kyle Swartz is editor of Cannabis Regulator. Reach him at kswartz@epgmediallc.com or on Twitter @kswartzz or Instagram @cheers_magazine. Read his recent piece Does Cannabis Help Craft Beer Sales?

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