¿Libertad personal o negocio millonario?/Get high, sell high

This fall I wrote a piece for El Cultural, the high-minded magazine supplement of Mexico's La Razón newspaper, about Canada's decision to legalize cannabis. The article was published in Spanish, translated by my friend Wenceslao Bruciaga. It was a complete privilege to work with Wences and be published in El Cultural.

Canadian readers might find this a bit 101, but here is the original English text of the piece.

Get high, sell high: Canada’s cannabis reforms are more about money than personal freedom

By Paul Gallant

One warm fall night two years ago, a lineup of people stretched down a block of Church Street in downtown Toronto, all of them waiting to get into the Cannabis Culture boutique. The store was run by Marc Emery, known as Canada’s “Prince of Pot,” a marijuana entrepreneur who has gone to jail a few times for the cause. The store might as well have been selling bottles of eternal youth, people were so excited. Each time the boutique’s front door opened, marijuana smoke rolled out into the street, but you’d hardly notice because there was already a cloud of pot hanging over the sidewalk—so many people in line were already smoking up. Mostly young, mostly middle-class, the patrons looked like attendees at a Drake concert. Inside, in glass jars on a glass counter, there was a choice of 12 strains of marijuana, with names like Sharks Breath and Girl Scout Cookies and prices ranging from C$5 to C$14 per gram.

At the store’s peak, more than 1,300 people visited the location each day. And it was just one of maybe hundreds of marijuana boutiques that sprung up across Toronto and across the country after Canada’s federal government announced its plan to legalize marijuana. After the government started preparing the policy in 2015, Canada quickly became the Wild West of weed, with entrepreneurs, the police and various governments pulling this way and that, trying to anticipate what the marijuana marketplace will look like after October 17, 2018. In the meantime, on sidewalks, in parks, at parties and at concerts, the smell of dope has become more common than the smell of tobacco. Canadians tokers embraced the transition period as an opportunity to experiment and push the limits. Walking to the grocery store, walking to my gym, in outdoor beer gardens and on restaurant patios, for the last couple of years, I smell weed everywhere I go.

During the 2015 election campaign, Trudeau had promised not just to decriminalize marijuana, like the Netherlands with its coffee-shop culture, but to fully legalize it and create a system for Canadians to grow it, sell it, buy it and smoke it. The system might also provide ways to export it, if the rest of the world wanted to buy Canadian. The old system, Trudeau argued a few weeks before the election, “makes it easier for young people to access marijuana than it is for them to access beer or even cigarettes and continues to fund the kind of crime… that is a real challenge for our communities.”

Soon after the election, entrepreneurs and smokers started acting like all the laws against marijuana had been wiped off the table. Boutiques and lounges like Cannabis Culture sprung up all over, sometimes several on the same block. It seemed like there were no rules at all.

But over the last couple of years, the government has made it clear that Canada’s version of legalization will not be a free-for-all. By the spring of 2017, seven Cannabis Culture locations, including the one on Toronto’s Church Street, had been raided and closed by the police, as had many other pop-up boutiques and dispensaries across the country. Emery and his wife Jodie were charged with drug trafficking, conspiracy and possession. (A year into the court process, Emery had been fined a C$5,000 for trafficking—a mere slap on the wrists.)

When the laws come into effect on October 17, cannabis will be much more tightly controlled now than it has been over the last few Wild West years. “On the face of it, the restrictions that the government is putting on the marketing and the distribution seems pretty strict,” says Jan Westcott, president and CEO of Spirits Canada, an organization that represents the distilled spirits industry. Pot growers might eat into the “good times” market share of his members.

The all-night pot shops and lounges that are still operating will likely be put out of business. The police will again become interested in teenagers smoking dope in playgrounds. Unlicensed marijuana dealers will be arrested and charged.

That’s because the legalization is not so much about fun, but about money. The days of big-business cannabis companies has begun. You’ve heard of Bacardi and Smirnoff, Marlboro and Pall Mall? Get ready to hear about Aurora and Canopy Growth. Sure, Canada’s new pot laws will make life more relaxed and convenient for smokers. No more need to do drug deals in dark alleys. But mostly it’s about going corporate, and most importantly, more taxes. Turn on, tune in, buy low, sell high.

+++

Canada loves to regulate pleasure. Historically, there’s a culture of trying to protect people from their impulses and the consequences of too much fun. We had national Prohibition on alcohol from 1918 to 1920 (my home province, Prince Edward Island, outlawed booze until 1948). Until the 1960s in Ontario, Canada’s most populous and richest province, liquor-store customers carried booklets where their purchases were recorded, so employees could say “no” if a customer was buying too much booze. “Fundamentally, they don’t trust the users of these products and they want to be sure it’s not too easy to get and it shouldn’t be too easy for children to get,” says Craig Heron, professor emeritus at York University’s Department of History and author of the 2003 book Booze in Canada: A History. Since Prohibition, provincial and territorial governments have controlled almost all alcohol distribution. In some provinces you can buy hard liquor only from government stores, and the sale of beer and wine is also very tightly regulated. There are complex rules about when you can buy alcohol, where you can drink it and how much you must pay for it. Bar closing hours are taken very seriously.

And that’s just booze. Our tobacco laws are among the strictest in the world. Taxes make cigarettes very expensive (an average of C$14 for a pack of 20), and, in the stores that sell them, cigarettes packages must be hidden behind unlabelled doors. Health warnings must cover 75 per cent of the packaging. A new law expected soon will prohibit any branding on cigarette packages—all brands will be forced to use the same font on a plain brown background. So much for selling smoking as a glamorous lifestyle.

So nobody would have pointed to Canada as the first country, after tiny Uruguay, to legalize pot. Though almost half of Canadians (49.4 per cent of men, 35.8 per cent of women) will smoke marijuana at least once in their lifetime, according to the government agency Statistics Canada, only 14 per cent of Canadians aged 15 years and older reported use of cannabis products in the previous three months. Fewer Canadians smoke up than Icelanders, Americans, Italians and Kiwis.

Marijuana was made illegal in Canada in 1923—almost 100 years ago. Maximum penalties for possession of up to 30 grams are a fine of $1,000 or six months in jail, or both. Being convicted of trafficking pot can bring a sentence of life in jail. But since the 1990s, government and police haven’t been particularly interested in enforcing marijuana laws. The Baby Boomers generation, which still holds the strings of power, associate weed with happy memories of their wild, freewheeling youth—something to take as seriously as a few beers. The police have better things to do than arresting people for a joint. In Vancouver, the country’s most relaxed jurisdiction, growers like Marc Emery were mostly left alone to refine their products, creating hybrids for energy or relaxation. Canadian growers became known for more and more THC content in their weed, providing an intense high.

After a court ruling in 2000, the government was forced to permit the use of marijuana for medical purposes. At first, the government envisioned a system where medical marijuana was grown and distributed by the government, for people who had a prescription and a diagnosed health problem, like cancer. But cannabis clubs and lounges opened that were very relaxed about requiring a prescription. Their legality was questionable, but they were mostly discreet, and the police didn’t pay them much attention. But then Justin Trudeau and his Liberal Party won the 2015 federal election, after promising to legalize marijuana across the board. Suddenly the cannabis suddenly industry exploded. Nobody cared about discretion anymore.

+++

Although pot legalization is good for the “nice and easy” Canadian brand, Trudeau is not interested in making Canada a party destination, like the Netherlands. He’s mostly interested in making money. While there will be additional healthcare costs due to increased marijuana use, legalization is expected to be very profitable for all levels of government. Government revenue from the control and sale of alcoholic beverages was C$11.9 billion in 2016/2017. Government revenue from tobacco sales was an estimated C$8.4 billion in 2016/2017. Cannabis is expected to be taxed at C$1 per gram, or 10 per cent of a product’s price, which may earn the federal government C$100 million in the first year. But there will also be revenue from sales tax, government distribution profits, licensing and property taxes, leading some to speculate that various levels of government could make C$2 billion annually from pot.

Will crime go up or down? Right now, most crime in Canada related to marijuana are connected to its sale and use. About 58 per cent of police-reported Controlled Drugs and Substances Act offences in 2016 were cannabis-related (the rest were for offences relating to the importation, exportation, trafficking, production and possession of other drugs). Of course, these marijuana-related “crimes,” 54,940 of them in 2015, will disappear off the books when marijuana becomes legal. Even then, cannabis-related offences have decreased over the last five years, maybe because the police aren’t even trying to enforce them any more. The rate of drug-impaired driving is low (8.5 incidents per 100,000 trips), especially compared to the rate of alcohol-impaired driving (186 per 100,000).

Although legal pot is a new frontier, it will probably look a look like a combination of existing alcohol and tobacco regulation. Canada’s 10 provinces and three territories will be in charge of distribution, just like with booze. The provinces and territories will also make rules about who gets to sell (in some cases, just the government; in others, government and private stores) and under what conditions. Municipalities will be able to create their own rules, and may be able to prohibit the sale of marijuana altogether—some Canadians may have to buy their legal dope online from government websites. Better than striking a deal in an alleyway from a dealer who’s a friend of a friend, I suppose, but not as convenient as popping by one of Amsterdam’s coffeeshops.

Actually, when you look closely at the provincial laws, there will be very few places outside the home where Canadians will be able smoke marijuana; there’s been a debate about whether it should be allowed in places like seniors’ homes. Smoking tobacco isn’t allowed inside most public buildings, including bars and nightclubs, and, so far, it looks like pot will be treated the same way. Though some provinces will allow “public” smoking, there are rules to keep it away from where children might be.

Just weeks before the official legalization date, there is a tremendous uncertainty about how things will unfold. Alberta, the province with the most liberal liquor laws, will allow as many as 250 retail locations, some private, some government, to open in 2018. Ontario first planned to open government-run stores. Then the provincial government changed and declared that pot will be sold only through a government website until April 1, 2019, when a plan for private retailers will come into effect. Most provinces will allow consumers to grow as many as four plants at home for personal use; Quebec, usually seen as a liberal province, won’t allow it.

“Where we are going to be on October 17 is going to be vastly different from where we’ll be five years from now,” says Westcott. “One of the aspects of this whole thing is that there’s almost no medical research. Almost zero, partly because it’s been illegal.”

The reforms are a dream for medical, sociological and crime researchers, who will finally be able to conduct experiments, and observe how legal access to marijuana plays out in various jurisdictions. Will violent crimes go up or down? Will productivity at work go up or down? Will there be more health problems or fewer? Will the black market shrink and disappear? Will more people smoke more pot in the provinces where pot is more freely available? What we do know already about marijuana is that it’s less harmful than alcohol, at least in the short term.

“When it’s legalized, it’s likely that cannabis will in many cases substitute for alcohol,” says Tim Stockwell, a professor of psychology at the University of Victoria and director of the Canadian Institute for Substance Use Research. “[For example,] although cannabis is not a good thing to use while driving, people tend to go slower, while people who are drinking tend to go faster. There is some evidence that impaired driving and road crashes could be reduced. That may also apply to violence…. There are 60 ways that alcohol can harm you; there are only two or three ways cannabis can.”

It will take years to collect statistics on how legalized pot will transform Canadian society. But the most dramatic change has already been taking shape on the business side. Because the provinces will be the main distributors—and they’ll want to buy in bulk—the playing field will be skewed toward big players that can cut deals to sell to uniform-quality pot to populations of millions. This new industry, perhaps one that will eventually rival alcohol, tobacco and pharmaceuticals, intends to go global. Although nine U.S. states now permit the sale and use of marijuana for recreational purposes, and 36 permit it for medical purposes, the drug remains illegal in the U.S. nationally. Federal enforcement officials in the U.S. have let the pro-pot states do their own thing—within reason. That’s kept their industries small, more local and less corporate. In Canada, companies like Canopy Growth (WEED.TO), Aurora Cannabis (ACB), Aphria Inc. (APH) and Cannex Group Holdings Inc. (CNNX) are listed on the Canadian Stock Exchange. Investors have already made millions on this industry, which, in the U.S., still has difficulty accessing traditional financing.

This summer, Corona beer maker Constellation Brands invested C$4 billion into Canopy Growth, which already had an estimated value of C$10 billion. Just last year, Constellation Brands had made a C$200-million investment last summer to help Canopy produce a non-alcoholic cannabis-based beverage (which will not be legal in the early days of legalization). Canopy predicts as many as 30 countries are likely to allow medical marijuana in the near future. Its chief executive, Bruce Linton, says the company is targeting C$1 billion in overseas acquisitions over the next 12 months. With the right strategy, Canada could become to pot what Hollywood is to movies or Silicon Valley is to tech.

Although great fortunes await, the pot business still carries risks. Some employees at legal-in-Canada cannabis companies have been turned away at the U.S. border and banned for life from entering the U.S., deemed inadmissible because they are considered to be living off the profits of the drug trade. Going global might be trickier than some investors think. Unlike in California, one of the nine U.S. states where recreational marijuana is legal, medical marijuana outlets may not get preferential treatment in getting licences to sell. The provincial and territorial governments that will be doing the licensing are unlikely to issue licences to businesses that broke the law during the Wild West period. Mark Emery, for example, by being a pioneer, may have shut himself out of the legal pot business. There have been calls for a “marijuana amnesty” to clear the criminal records of people convicted of past marijuana offences. Considering that the government apologized last year to LGBT Canadians for past laws against homosexuality, you have to wonder if the government might apologize to potheads for past government persecution.

After three Wild West years, it may be hard for the government to restore Canadian-style law and order. Businesses that have made big profits in the last few years may be reluctant to close, even if they don’t get licences. Potheads who have grown accustomed to smoking up wherever they want may not want to limit their use to their own home. Police officers who have spent years turning a blind eye to marijuana use will have to again become diligent, arresting black-market dealers, people who are smoking in the wrong places and people growing more plants than they’re allowed. Sounds like a real nuisance.

Habits are hard to break. This month I dropped by the fifth annual Karma Cup, a cannabis trade show held in a parking lot on Church Street in Toronto, across the street from where Cannabis Culture did its booming business. Crowds packed in to sample the wares of dozens of booths selling “elite cannabis products” that were judged for quality. There were lots of Guns N' Roses T-shirts, leather jackets and dreadlocks. Many of the products—edibles, for example—probably won’t be legal after October 17, but at this point who cares? I didn’t see police anywhere, even as the clouds of marijuana smoke wafted down the block.

Yet now there is a multi-billion-dollar industry with lobbyists and the power to create thousands of jobs and fortunes for investors. Industry demands for a level playing field will put the police and the government under much more pressure than worried parents, priests and school teachers ever did. The stakes are much higher than a few joints in the school playground. Canada has created a new industry and the world is watching.

Three unspeakable observations

I think Pope Francis, who seems genuinely humble, is doing an impressive job at reframing the image of the Roman Catholic church. 

I think the Harper government, specifically Foreign Affairs Minister John Baird, is doing a decent job on international human rights (let's go after Russia now, shall we? Perhaps Canada can host Pride House at the Sochi Olympics).

Closer to home, my garbage collection has been better (less mess on the street after pick up) since Rob Ford privatized it (I feel bad for the lost union jobs, but I'm speaking purely as a consumer).

Do these achievements affect my global view of these leaders? Not so much. Don't get me started on the Roman Catholic church's larger problems with sex, gender and social justice, the Harper government's job on international trade (or domestically--whoa!) or Rob Ford's vision, honesty, competence or mental health. But sometimes you have to give credit where credit is due, even if it doesn't change your vote.

Built Ford Tough

Progressive Torontonians are freaking out about the election of Rob Ford as mayor, not just because they're worried about what he'll do to the city. They're also disturbed by how many of their fellow citizens voted for a man with track record of bigoted speech about gay and lesbian people and Canadian newcomers--or just about anybody else who is not a car-driving, home-owning middle-class straight married person. Is this what my neighbours/people in the 'burbs think of me? they wonder.

It's true that these attitudes are part of the Ford package. But I think other less worrisome (though no less desirable) factors played a part in Ford's election.

The biggest factor is star power. Torontonians love to vote for a strong, sharply defined character. Exhibit A, Mel Lastman. Rob Ford ran as himself, a classic love-em-or-hate-em character, right out of The Family Guy. Even David Miller, with his stylish hair and upright appearance, had a Soccer Dad/Dudley Doright persona that was immediately understandable on an emotional level. Ford's main rival, George Smitherman, had been a "character" in the past, but ran a campaign where he tried to quash his established persona of Furious George and failed to adopt a new persona along the lines of "gay dad." Voters wondered who Smitherman was and, ergo, if he was hiding something. Torontonians will vote for a big, authentic personality, no matter what policy it's offering them.

As well, David Miller's mishandling of the 2009 garbage strike meant that even moderate voters were keen to punish anyone who seemed gutless in seeking efficiency and, especially, seeking efficiency from the unions. They wanted guts. Pantalone was too closely associated Miller--and too pro-labour--to answer this need. Smitherman, bizarrely, considering his past track record, wasn't able to position himself as someone who could be a tough bargainer. The one thing you know about a loose cannon like Ford is that he won't back down (even when he should). Will it he be effective? I doubt it. But voters wanted someone who acknowledges the problem and will try to solve it.

For better or, more precisely, for worse, it's shallow perceptions, not what runs underneath them that will win or lose you an election in this city. Ford ran a great one-note campaign that capitalized on voter frustration: stop the gravy train, stop the gravy train, stop the gravy train. Ford's specifics--tearing up the streetcar lines or defunding Pride celebrations--were not, I think, a big part of why people voted for him.

Fingers crossed.

Who cares about young people?

Ontario's new law that prohibits drivers under 21 from drinking any alcohol at all before driving reminds me of something an old friend said years ago.

He used to do market research, focusing particularly on young people, what attracts them to particular brands, what values they wanted to see in consumer products, etc. He pointed out that nobody cares about youth issues except youth themselves. Teenagers might rail about not being able to vote or drink or how their schools treat them or how they are targeted by the police. But then they turn of age, leave school and they don't care about those issues anymore. In fact, young adults often put a great amount of distance between themselves and "youth" issues. I know there are adults who advocate for young people and they do great work but they are an exception, and usually paid for their advocacy.

Which is why governments can get away with clearly unconstitutional laws like these. By the time someone gathers up steam to launch a proper court challenge, which can take years, their age makes them stop caring; they move on to other things. There is not enough continuity to create a genuine movement.

Imagine if this law was applied to any other group that's protected by the Charter, which protects people from discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. For "under 21," imagine "men," "Protestants," or "Irish-Canadians." It could never happen. That's because these characteristics are (mostly) permanent and the affected individuals would stay affected for a long time, long enough to lobby against the law.

Youth is fleeting. Governments exploit that fact every time they take away young people's rights. It's politically pragmatic but it's hardly fair.

What Adam Giambrone needs to do next

Take a break from electoral politics, Adam. You've worn your heart on your sleeve about your political aspirations for a long time and it's not too late to still become prime minister (or perennial NDP leader as the case may be). At 32, you have plenty of time to pursue this goal, and maybe even become premier of Ontario along the way.

But now is the perfect time to catch your breath. Resign as TTC head and don't bother running for councillor in the next election. In your ward, you are not the most popular person right now (for pesky issues, I know, like the Queen Triangle debacle, the narrowing of Lansdowne, for parking on Dundas, but these are issues dear to the hearts of voters). Losing the next election would add insult to injury. Step away from the ballot box.

Your early fresh-faced entry into electoral politics proves the maxim about power corrupting.

(Disclaimer: I don't think a promiscuous person is a corrupted person. My qualm is cultivating the public image that you're single and available (how else was Now able to mistakenly presume you're gay?), then parading a quasi-wife figure when you announce your candidacy for mayor--as if that's even necessary in this day and age--then, when confronted with the facts of a sexual relationship with somebody other than your quasi-wife, lying about it. Toronto could have easily handled--perhaps even celebrated--a swinging single mayor. It's the role the women were cast in that's off-putting. If, with the support of your quasi-wife, you could have replied to The Toronto Star allegations with a confident "So what?" you wouldn't be hiding out in Italy this week.)

So here's what to do. Spend the next three to five years doing something else. Something that will make a difference but is somewhat under the radar. Run the United Way. Get involved in some green-energy company. Do an academic fellowship for some kind of centre for innovation. Show that you're not just a smarmy politico but someone who has the smarts to solve real problems and deliver real tangible results. We can debate forever whether the TTC would have been better off or worse without you; it was a major mess and remains a major mess. Grab hold of a project that will show success within five years, something manageable enough that the success will show your signature. Pick something close to your heart that shows you really care about the work, not the public attention it gets you. If you're out of the headlines for a few years, so much the better.

After people have all but forgotten your time as city councillor, run for provincial or federal politics with a campaign that demonstrates how much you've learned from your time in the private/not-for-profit sector. Tap into that newfound wisdom for political problem-solving strategies.

Hey, it worked for former Winnipeg mayor Glen Murray (who admittedly wasn't trying to leave behind any taint other than being non-Ontarian) who just became an MPP at Queen's Park. His time as president and CEO of the Canadian Urban Institute was not wasted. Yours won't be either.

Hardly surprising

Strange how it's not legal to discriminate in law but in cash, well, the Tories run a slightly more segregated ship. Can anybody say "sponsorship scandal"? The key difference seems to be that the Liberals showed preferential treatment to certain Quebec ridings while the Conservatives show contempt for LGBT Canadians.

The Tories & Pride

I swear. It's not like Ablonczy used any of the words in the LGBT lexicon when she was handing over the money. She must have some kind of plausible deniability. Can't she claim she thought Pride was a casino?

But seriously. Either there is a set of criteria for the federal tourism money or it is a pork-barrel program where MPs pick and choose who gets what. This kerfuffle, and the treatment of poor Diane Ablonczy, suggests that latter, which should be far more embarrassing for any legitimate government than the complaints of a few rightwingers.

If there are criteria--and I'm sure there must be--it would be hard to imagine Pride Toronto, with its size and economic impact, being excluded for any reason other than discrimination based on sexual orientation which, the last time I looked, was against the Charter of Rights and Freedoms. Either way, it makes the Conservatives look very, very bad. Pork barrellers or anti-Charter discriminators. Take your pick.