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Pot legalization: Seven questions that still need to be answered

WATCH ABOVE: Feds introduce bill to legalize marijuana legal in Canada

Legalizing recreational marijuana is one of the most complicated public policy projects to happen in Canada in years.

There are a lot of moving parts. Some questions were answered today — but several important ones weren’t. Here are seven of those:

How will legal pot be sold?

The feds are leaving this one up to the provinces, as with alcohol.

There are four options:

  • Existing provincial liquor stores. This would be an easy system to set up, and would please public-sector unions. But addiction experts warn that pot and alcohol don’t mix, and selling them together might signal otherwise.
  • Licensing existing dispensaries. In much of Canada, there are already bricks-and-mortar stores selling pot, albeit illegally. Sometimes police ignore them, sometimes they shut them down. One approach would be to licence and regulate them. But would the dispensaries’ libertarian culture be willing to work with regulators who (among other things) would force them only to buy from licenced producers? And will dispensary workers with drug-trafficking charges be eligible to be licensed to sell pot?
  • Separate government-owned stores. This solution solves the problems of selling alcohol and pot together, and provincial alcohol bureaucracies may see it as fairly easy to administer. On the other hand, it would be cumbersome and expensive to set up, involving leasing real estate in towns and cities across Canada.
  • Mail-order. In the federal legislation unveiled today, people will be free to order pot by mail in provinces that haven’t set up legal cannabis stores by the time legalization happens. In provinces that ignore the issue, or can’t get organized by July of 2018, this will automatically become the distribution system, and it will be perfectly legal. It has disadvantages from a public-health point of view, though, in that giving you advice about safe consumption, or cutting you off because you’re already stoned, isn’t in the UPS guy’s job description.
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“In the initiation period, I would expect to have direct online retail from the licensed producers, because all the provinces are going to get their infrastructure done in different ways at different rates,” says Bruce Linton, CEO of Canopy Growth, a large medical marijuana growing facility in Smiths Falls, Ont., which plans to produce recreational pot after legalization.

‘That will probably be a necessary thing for a few years, and then maybe over time phased out. In most provinces, they’ve declared that it’s going to be controlled by the liquor board, either through a separate entrance into the same store or something that’s another liquor-board store, run in the same way.”

READ MORE: How will legal pot be sold? Three things that might happen, and one that won’t

As for the dispensaries, Linton says he expects them to die out: “I don’t think they have a business model that’s going to persist beyond the next year or so.”

Jenna Valleriani, a University of Toronto PhD student who is studying marijuana issues, predicts that provinces will set up a separate chain of stores: “I would expect them to have government-controlled retail, separate from liquor stores, but they’re still going to control the warehousing and the administrative details and have some kind of government regulation.”

How much will legal pot cost, and how will it be taxed?

Money-hungry governments will be tempted to see how much they can get away with charging, but that undermines part of the point of legalization, which is to get rid of the black market. The higher the government price, the more room there will be for the illegal pot market to continue. Provinces, which will have to go to a certain amount of trouble to make legalization work, will certainly want a cut (the same could be said of municipalities).

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The same logic will apply if provinces want to apply a ‘social value pricing’ system, as they do with alcohol (regulations saying a bottle of spirits can’t be sold for less than a given price, for public -health reasons, for example.)

READ MORE: How marijuana will be taxed remains unclear

“It’s going to be difficult to get right,” says Michael DeVillaer, a drug policy expert at McMaster University in Hamilton, Ont.

“If you keep the price too low, you increase consumption and increase problems. If you put the price too high, you allow the contraband market to flourish a bit more.”

On the other hand, Linton says, the legal market — involving regulated, accountable producers — will have a structural advantage.

“The advantage of price is going to go to the lawful, economy-of-scale producer,” he argues.

“I don’t think we’ll see such a price burden as to give a really substantial ongoing advantage to the black market. I think the base price will be about seven bucks a gram, plus a 25 per cent tax.”

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READ: Legal pot in Canada could sell for $5 a gram — or less

Will I be able to walk down the street next year smoking a giant spliff in front of everybody?

Probably not. Public intoxication is an offence in many provinces, and local governments regulate smoking. Throw edibles into the mix, or cannabis products for vaping that don’t have that familiar smell, though, and it may be hard to tell if someone’s consuming pot in public.

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“I don’t think we’re going to see any allowance for public consumption, period, except in designated spaces,” Valleriani predicts. “Colorado and Washington are really strict on public consumption not being allowed.”

I’m curious about pot, but smoking is gross. What about edibles?

The government has kicked this ball down the road a bit — they say they want to think more about the regulations. In the meantime, though, you’ll be allowed to make your own edibles under legalization, “provided that dangerous organic solvents are not used.”

Linton argues that the future of pot doesn’t involve smoking, to any great extent. The reason people buy buds for smoking on the street is that if you don’t trust your supplier, it’s pretty clear what they are (a solid or liquid could be anything).

“Why would you buy it in a format that involves smoking, when you would prefer another method of consumption? If you trust the supply chain, you’ll buy oils, you’ll buy them in a format that’s more easily consumed as a group, and you won’t pay for components that are waste just because you don’t trust the vendor,” Linton says.

“If you’re willing to buy it from folks who have no source of origin of the product and no obligation to be at the same corner tomorrow, you’re probably foolish to trust the supply chain. But if your supply chain looks a whole lot like what Canadians know, which is government involvement in the distribution of distilled spirits, I think the trust equation will change entirely.”

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Also, Valleriani points out, it’s hard to make high-quality edibles at home.

“In terms of people making these products themselves, it’s difficult to consistently dose these products when you’re the baker.”

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“I think you’re going to see a very super-rapid evolution of people using a format that’s liquid,” Linton says. “It could be a beverage that might be infused to a strength and duration that might be similar to beer or wine.”

READ: Digesting legal weed: The hidden risks of eating marijuana

How will minimum ages actually work?

The legislation sets a minimum age at 18. There are serious penalties for selling, or giving, pot to people under 18.

On the other hand, the provinces are free to set their own age limits for buying pot, much as they now do for alcohol.

At first glance, though, this potentially sets up an odd grey area. If the federal minimum age is 18, and a province sets their minimum age at 19 (or 21), where does this leave 18-year-olds? Is it legal, or at least not very illegal, to sell them pot?

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“It doesn’t seem clear how they’re going to police a 20-year-old selling a bit of cannabis to an 18-year-old,” Valleriani says. “It does still fall in line with federal legislation.”

Also, she asks, could an 18-year-old, too young to buy pot from the local cannabis store because of a provincial minimum age, legally buy it by mail from a federally licensed producer?

“It doesn’t seem very clear on how that’s going to unfold.”

Will I be allowed to grow my own?

As far as the feds are concerned, sure. The law allows four plants per household, none of them over a metre tall.

But they’re not the only government that gets a say. Municipalities are bound to want to regulate home grows, given the smell, fire hazards and potential for conflict with neighbours.

(Also, some provinces require someone selling a house to disclose to the buyer if marijuana has been grown there.)

READ: Planning to grow legal pot? Check real estate rules first

READ: Smelly, fussy, humid: Why you may not want to grow your own legal pot

What are we going to do about the treaties?

This is a sleeper issue worth keeping an eye on. Canada has signed three international treaties saying we won’t legalize pot. We can go ahead anyway, but only if we withdraw from them by certain deadlines. If we don’t start that process by July 1, for example, we can’t legalize pot before January of 2019.

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The treaty issue wasn’t mentioned today.

READ: Why a 56-year-old UN treaty stands between you and legal pot

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