NORML Canada: 3 Massive Ways COVID-19 Put Canada’s Cannabis Reform Into Warp Speed

COVID, cannabis, and Canada

COVID cannabis reform cannabis cannabis in canada cannabis history

Written by Alex Krause for the NORML Canada newsletter. Edited for this blog.

On March 11th, 2020, the World Health Organization declared a global health pandemic as COVID-19 cases began to pop up in jurisdictions worldwide. On Monday, March 16th, Justin Trudeau announced that Canada would be closing our borders with the US. The very next day, Ontario Premier Doug Ford, decided to call into effect a complete province-wide lockdown in response to public concern over the surge in COVID-19 cases and the genuine potential to overwhelm hospital resources.

The Issue of COVID-19: An Unlikely Catalyst for Change

The two most significant blind spots of cannabis policy at the beginning of the pandemic became even more apparent during the lockdown.

1. The legal industry excluding operators from the legacy market, which includes the systemic racism tied to the criminalization of cannabis in the first place. The legal cannabis industry’s injustice regarding the equitable treatment of minorities, expungement of nonviolent records, and representation of traditionally marginalized groups, including medical cannabis patients, people with disabilities, Black, Indigenous, POC, and LGBTQ communities.

2. Federal level cannabis legislation flaws have been well reported since day one of legalization. These flaws jeopardize the safe sale of cannabis (the Liberal Party’s original stated intent of legalizations was in the context of “public safety and to remove the illicit market”) and jeopardize the hard legalization movement fought for over the last four decades. Banks and financial crediting entities have been reluctant to support this new economy. Long before the pandemic emerged, Cannabis retailers would soon play a more significant role in municipalities across Canada (specifically Ontario).

Once Canada’s economy came to a grinding halt, it became clear that cannabis access was more than just a recreational consumer “trend.” Its importance as an “essential service.” The definition of cannabis as an “essential service” would have ripple effects across the country. Along with liquor, grocery stores, and many other “essential services,” cannabis would eventually gain “essential” status across Canada. A few provincial jurisdictions were slower to recognize the new heightened role of provincial distributors as part of the supply chain to access legal cannabis products.

Canadians saw the first major pivot in government policy with COVID-19 creating an overwhelming and unignorable impetus for regulatory reform. In the cannabis industry, this form quickly took shape, expediting openness to online click-and-collect/delivery options in jurisdictions where it had not been available before.

Read the AGCO announcement from April 3, 2020

COVID cannabis reform cannabis cannabis in canada cannabis history

As soon as click-and-collect and delivery options were permitted, cannabis retailers were left scrambling to accommodate the never-before-permitted digital ordering channels to promote social distancing procedures, including direct from retailer delivery and curbside click and collect. This stage of the pandemic highlighted a new regional challenge – that for those in rural areas without access to a local “pot shop,” it was hard to order and access same-day delivery options. Plexiglass windows, masks, virtual inspections, and social distancing circles quickly became the new norm. Trends began to emerge in cannabis, and other retail store environments, which resulted in record provincial cannabis sales as people started venturing out to their local stores to stock up.

Solomon Israel COVID-19 wrote about the COVID-19 cannabis sales boost in this story

Canada Post became a substantial bottleneck for cannabis parcel deliveries. Even they were aware of how crucial a part they play in the cannabis supply chain, their role had become, and began to try to accommodate delivery to the customer’s door. April 3rd marked a significant milestone for Canada’s medical cannabis patients when medical access to cannabis was officially deemed essential after a House of Commons petition.

Mugglehead Media featured a story about this in April

Due to increased public pressure, a few LPs were first to adapt to this new reality by offering alternative delivery programs. Some LPs began implementing sympathetic COVID-19 pricing and the adoption of delivery services that avoided reliance on local community mailboxes or post offices. Instead, they allowed deliveries to arrive directly at the customer’s door.

MJBiz Daily’s Matt Lamers wrote about this in March

Throughout April and May, Ontario alone added more than 13 retail cannabis stores, bringing the total to 87 by June 10th, with another 413 Retail Store Authorizations “in progress.” It appears that Health Canada is expediting the licensing of LPs lately. We have seen some small yet promising signs of Health Canada deferring license fees amidst the immense financial pressures on Canada’s hard-hit economy.

COVID cannabis reform cannabis cannabis in canada cannabis history

Issues in Canadian retail cannabis during the COVID-19 pandemic

Another critical point for cannabis amidst COVID was broadening the scope of the BDC, Canada’s federal investment bank, to expand its reach to include potential investment in Canadian cannabis businesses.

Early in the lockdown, it became apparent amidst mass layoffs that the pandemic had accelerated some of the economic downturn faced by many larger cannabis producers and brands. We saw the unfortunate confirmation of basic economic principles – that job security in the cannabis industry relies on the profitability of these cannabis companies. With added layers of regulatory red tape, some industry watchers believed that the layoffs were bound to occur eventually, with critics of the Cannabis Act calling for the end of the legal landscape as we know it, referring to it all as “fake legalization’.

The Legal Tender campaign, by Alan Aldous, created some momentum to lobby the BDC to remove its blanket exclusion of cannabis companies in desperate need of federal funds to maintain their workforce. “The cannabis industry is doing its best to provide Canadians with an uninterrupted supply of legal cannabis, but it is not immune to the effects of COVID-19. Cannabis businesses deserve access to the same financial support being made available to other industries. Cannabis sector jobs are just as worthy of protection as any other,” says Trina Fraser, in the Legal Tender press release.

The efforts were successful and access to medical cannabis as an “essential service.” Cannabis retailers across Canada reinvented themselves, modernizing to adapt to the new reality of online shopping and social distance shopping. In many ways, cannabis retailers are a “shining light” at the “end of the tunnel” as far as the legalization reform efforts are concerned.

Cannabis and cannabis retail have represented a substantial economic boost to Canada’s stagnating economy during the pandemic. What has become clear is that the demand for cannabis sales has remained at all-time highs over the COVID outbreak, including new 2.0 formats of cannabis topicals, beverages, edibles, and extracts.s in

COVID cannabis reform cannabis cannabis in canada cannabis history

Issues of racism and exclusion in the Canadian cannabis industry

Over the last four weeks, the world has yet again shaken to its core by the horrifying and tragic video footage that surfaced of brutal police brutality. The murder of George Floyd by police created a global #defundthepolice movement, which has spread all around the globe.

NORML Canada believes that there exists a systematic exclusion of BIPOC individuals’ voices and organizations from the decision-making conversations involving the industry. It is time that the cannabis community begins to reshape and reform the government’s original stated goal – to pursue legalization as a means of increasing public health by removing the illicit market. It is time for our government to consider reframing a more realistic and positive outcome, removing and acknowledging historical injustices against racialized communities, and the need for reforms that promote inclusion of all marginalized groups to advance and distribute the economic value represented by Canada’s national cannabis industry.

Despite the giant regulatory leaps we have witnessed over the past months, it is discouraging to see the Ontario government move to take away direct from retailer delivery and curbside pickup options. Many cannabis insiders believe this is a massive step in the “wrong” direction by encouraging only in-store purchases, and click-and-collect will remain in place as the province loosens its COVID-19 restrictions. This move will hurt small business owners who have already made accommodations for delivery and curbside. As a result, the OCS will return to being the sole provider of delivered cannabis in Ontario.

COVID-19 has not disappeared. Ontario cannabis consumers are left with the awkward choice to rely on the OCS delivery, illicit cannabis from the unregulated market, and take additional risks to enter a cannabis retail store when they otherwise would not have gone into any store at all. What this means for Ontario retailers has yet to be determined, but it will negatively impact the bottom line on their already very slim margins.

Cannabis reform in Canada has come a long way since the pandemic started, but there is a long way to go before legalization efforts are “successful.” We need to start collaborating, and Alan Aldous is again looking at putting a coalition of industry actors together to fight for cannabis consumers’ rights in Ontario to access cannabis readily in the current pandemic environment. But first, we need clear and concise regulations from our legislators to minimize the risk to public safety, promote diversity and inclusion, and avoid undue harm to our fragile yet essential cannabis economy.

Health Canada, Justin Trudeau, Doug Ford, and municipal leaders must consider rational regulatory reforms to serve their constituents better. It’s time to comprehend the racialized historical implications of cannabis criminalization and the current, often overlooked, unintended consequences of the overregulation of cannabis.

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