Health Committee on Sept. 12th, 2017

[John Oliver, Liberal, Oakville, ON]

They're not. They are—

[Dr. Kevin Sabet]

No, no, you're much more sophisticated here than we are back in the States. After Colorado legalized it, most of the headlines I remember from that day said they had decriminalized it. Of course they hadn't; they had legalized it.

I would say decriminalization is part of it, but I would say commence a science-based education and advocacy campaign the way we've done with tobacco—very successfully in some countries—look at brief interventions, and work with doctors and pediatricians. It's a multi-faceted approach. The decriminalization side is only one aspect of it, and that's basically because we don't think it makes sense to give kids a criminal record. We think it makes more sense to get them help.

[John Oliver, Liberal, Oakville, ON]

I think part of the solution to this problem is, what are you trying to solve? I think maybe there's a different root problem that's trying to be solved in this legislation than perhaps you would identify with. In addition to getting marijuana, cannabis, out of the hands of our youth and the hands of our children, it's also about removing the black market, removing crime from this marketplace. That's probably overstating it, but at least reducing their opportunity to make profit in this particular space.

The other is addressing the health of safe production of marijuana. With regulated, licensed production facilities, you know what you're getting. It can be controlled, it can be tested, and it can be monitored. There are other objectives here that I think decriminalization doesn't address. I just want to leave it at that.

I have a question for Colorado and for Washington. The last presentation we had was from those two states, and they talked about a barring of vertical integration. It sounded like it was more just about competition. They didn't want to have one big company that was doing everything. Other than competition, was there a health reason or a legal reason?

[Andrew Freedman]

In Colorado, we don't bar vertical integration on either the medical or recreational side. In fact, on the medical side we require vertical integration. Most often, the thing I hear about why you want to bar vertical integration is to prevent a monopoly situation and the growth of one or two major players.

I would argue, and I think it's what we're seeing, that this is an agricultural commodity with small profit margins. The natural economy of it is to push towards larger grows. I do think that whatever kind of system you set up, in the long term you're going to see larger and larger grows.

On the retail side I think there are a number of different ways you can limit somebody owning too many retail shops.

[John Oliver, Liberal, Oakville, ON]

I think they're trying to bar the grower who then also was the manufacturer of a product who then retailed it. I think we're trying to break those markets down a bit.

[Andrew Freedman]

It certainly makes sense. What they're going to argue is that the more players in the market, the more people who are likely to not be in compliance with the laws. Dealing with fewer actors who have more capital to be compliant will create better actors.

Certainly there is a trade-off between the two. If you get thousands of actors, it is harder to watch over. I'm not sure if that argument carries the day.

[The Chair, Liberal, Bill Casey]

Time's up.

Mr. Webber.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Mr. Chair. Thank you, presenters.

Dr. Sabet, I really enjoyed your presentation. I enjoyed all the presentations but in particular yours. I agree with a lot of what you said, in particular about slowing down, slowing down the process where we're headed with this government, with it being 292 days before we become a country able to purchase and consume marijuana.

I do want to ask a question to Ms. Weeks, regarding her point. You mentioned education funding and making sure that we have that funding in place. Of course, $7.5 million was what your budget was. You talked about targeting parents in your first campaign, with youth next, and then younger children after that.

What was the timeline there with respect to the education process? Did you start this months and months, years, in advance of your July 1 deadline? Or was it something that you had to implement after the legalization of marijuana in your state?

[Kristi Weeks]

We had medical marijuana for many years. There was no money involved with that or education, so really it was with the passage of the recreational initiative in 2012 that we were given money in the initiative. But the money didn't materialize until the sales started a year and half later. In that first year and half we had no money to do this. We literally checked the couch cushions and worked with some other agencies. We came up with only $400,000 for that first campaign to teach parents how to talk to their children.

That was just money that we used from other sources. It wasn't until two years in that we got our first $7.5 million. By that point, the stores were open and legalization had been in place for a long time. People were saying, why haven't you done more? It was because we hadn't had that funding. The funding was based on tax revenue.

My suggestion was to make sure there is revenue for education up front that isn't dependent on the tax revenue that you will eventually get from your commercialized market.

[Len Webber, Conservative, Calgary Confederation, AB]

I think there should be funding in place now in order to educate our children before the product is legalized here in this country.

Mr. Freedman, you as well, for how long in your state did you educate your youth before it became legal ?

[Andrew Freedman]

I can't agree more with Ms. Weeks.

It's also one of the easier lessons learned on this. There are a few things. People want marijuana to pay its own way. That's an easy enough solution. There have been times when we've taken a loan out against our general fund that we then repay with marijuana money down the road.

We were stuck in a very similar situation. They budget two years; we budget every year. We were a little better than they were. We were out by that summer with messaging. If we could do it over again, we would be out two or three months before commercialization starts.

[Len Webber, Conservative, Calgary Confederation, AB]

At least.

I'm just curious with regard to the licensed retail outlets in your states. Are they 24-hour outlets where you can go and purchase marijuana at any time of the day or night?

[Andrew Freedman]

No, they are not. On the state level, they have to at least mirror alcohol, which I believe means they have to close at 10 p.m., but cities have decided to change those hours to.... That's the ceiling. They can go to 8 p.m., 6 p.m., and so on. In Denver, for a long time it was 6 p.m., and then it moved to 9 p.m., I believe.

[Len Webber, Conservative, Calgary Confederation, AB]

Is it likewise in Washington State?

[Kristi Weeks]

We do have limited hours much like for alcohol. I believe there's an eight-hour period when they're not allowed sales, between 11 at night and seven in the morning.

[Len Webber, Conservative, Calgary Confederation, AB]

This is where the black market, of course, thrives, at that time of day, when the retail outlets are closed.

Dr. Sabet, again, it's the black market. You mentioned that they will always undercut the legal market. You mentioned that, in Oregon, 70% of the sales come from the black market.

[Dr. Kevin Sabet]

Of the estimated market, according to the Oregon State Police, yes.

Of course, drug dealers are also dealing with multiple drugs, so again, unless we're talking about all drugs—which I don't think we are and I don't think we should be—and making all drugs cheap enough to get drug dealers out of the drug business, this becomes difficult.

If you don't mind, there is one point on the variation that I think hasn't been made and is very interesting, especially for elected officials accountable to voters. I don't have the numbers for Oregon, and Ms. Weeks can illuminate us on Washington, but what we've seen in Colorado is that the majority of the localities have actually voted against having a marijuana store in their community.

On the one hand we voted for amendment 64 or whatever, legalization, because we don't want people to go to jail. We want something new, and let's treat it like alcohol. On the other hand , if we ask, “Okay, well, by the way, if we put it in your backyard, is that okay? If we put it where you kid goes to school, is that all right with you,” most of the time people respond, “No, no, no. Actually, let's do it over there, not here.”

Again, I'm not as learned on the bill as I should be in terms of local control, but that is a very interesting issue. This does not seem to be a big issue for most people unless it really starts to affect them. Then you get the calls from your constituents saying, “You know, I sort of thought this was good, and maybe we could regulate, but they're not going to open it here, are they? What can we do to stop that?”

It's a very interesting thing that even in a pretty liberal state like Oregon—you've seen in the last election the majority of jurisdictions voting there—even jurisdictions that wanted legalization when they voted for it, voted against having a pot shop in their own community. I think that's going to be a very interesting discussion to have, too.

[The Chair, Liberal, Bill Casey]

Your time is up.

We're going to go to Dr. Eyolfson now.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr Chair.

I thank you, Mr. Webber, because you actually led into a question that I was about to ask, so this is perfectly in sync.

Dr. Sabet, you talked about how the black market will always undercut the price of the legal market. In our previous session we had testimony from Washington State that said that, in fact, the price was consistently lower in their legal market. How do you reconcile that?

[Dr. Kevin Sabet]

There are multiple reasons why the black market.... One of them is to undercut the price. I don't know; I'm not privy to that testimony. I would sure like to see it.

The other issue is that they are open all night. It's true that they don't care whether you have identification or not, so there are—

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

Which? In Washington?

[Dr. Kevin Sabet]

In Washington there's an age limit. My point is that with drug dealers there's no age limit. They're able to get around the regulations because they're not following them. They don't need to follow them.

[Len Webber, Conservative, Calgary Confederation, AB]

I know, but we're talking about the price—

[Dr. Kevin Sabet]

Yes.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

—and you had said that the black market always undercuts—