Legalizing cannabis has become a popular election topic in Canada, but specifics on how this can be done remain unknown. US States like Colorado or Washington are often used as examples of a direction Canada can move in, but each state’s approach and history has varying lessons on how to manage legal cannabis production and sale.
Analyzing states like Colorado or Washington shows comprehensive regulation of dispensaries is an optimal way to provide patients with access to medical cannabis. There is also evidence that a robustly regulated dispensary/retail system can be beneficial in the event that recreational cannabis is legalized.
Below we have listed a breakdown of several US states, along with some brief history of cannabis laws in Canada. When comparing Colorado and Washington, for example, it is obvious that the initial introduction of recreational cannabis was more successful in the former than the latter. This was largely due to Colorado utilizing their stronger, well-managed, pre-existing dispensary system as an implementation launching point, whereas Washington opted to largely under-manage their medical system, forcing the state to start from scratch for recreational.
On October 1st Oregon legalized ‘recreational’ cannabis. Similar to Colorado, the state had a managed dispensary model in place, and has utilized this existing system to help them transition from medical only to both medical and non medical.
California also recently overhauled their dispensary/medical cannabis rules, which puts them in a good position if full-scale legalization is ever adopted in that state. These examples further highlight the need to properly manage brick-and-mortar retail points (‘dispensaries’) to allow for a smooth transition from a strictly medical system like the MMPR to whatever the future holds for non-medical use in Canada.
If recreational cannabis is legalized before sufficient changes are made to the medical regulations and distribution points, Canada could have a situation that is more comparable to Washington, not Colorado, where the system has struggled with protecting patient rights as well as effectively supplying recreational demand.
In assessing these initiatives, one possible solution for Canada is to separate cultivation and distribution so that licensed producers handle growing while licensed dispensaries provide cannabis to qualified patients. As with other medical drugs, a cross-governmental strategy can be applied. At the federal level, this can involve approval of any new cannabis-based drugs and oversight of manufacturing patents, product labeling, and pricing.
Provinces can then deal with dispensary licensing and potential coverage options under provincial health care plans. Work being done in some municipalities like Vancouver and Victoria could also provide a good template for how to manage at the local level. Moreover, once government provisions are solidified, insurance companies, which are provincially regulated, will likely have more incentive to cover medical cannabis.
If ‘recreational’ cannabis is legalized before sufficient changes are made to the medical regulations and distribution points, Canada could have a situation that is more comparable to Washington, not Colorado, where the system has struggled with protecting patient rights as well as effectively supplying recreational demand. With conflicting medical cannabis rules alongside a new recreational model, Canada will have a confusing amalgamation of policies that are administratively complex and inefficient. To mitigate the risk of problems that will require reactive solutions, a proactive approach to medical cannabis regulation should be applied immediately.
In the wake of the election on Monday, we will likely begin to have some clarity as to what legalization will look like in Canada. So it’s important to know what other systems look like and how Canada can both adopt best practices, as well as improve upon mistakes made in other jurisdictions. The evolution of cannabis policies in Canada, California, Colorado, Oregon, and Washington are summarized below.
Featured image of an Oregon medical cannabis dispensary. Image via sfchronicle.com
A Glance at Cannabis Dispensing Policies in Other Jurisdictions
California
Medical cannabis was legalized in California in 1996 with Proposition 215, which added a section to the Health and Safety Code known as the Compassionate Use Act (CUA).
With a recommendation from a licensed physician, the CUA allows patients or their primary caregivers to obtain cannabis for treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief.
In 2004, the law was broadened to enable patients to form cannabis collectives or cooperatives and to create a voluntary identification system to provide patients with extra protection from arrest. Although there were many cannabis dispensaries in California 2004, they were not officially sanctioned. Instead, a De facto non-enforcement policy was implemented for dispensaries that complied with an established set of guidelines. The same guidelines also set limits for possession at 8 ounces of dried marijuana and no more than 6 mature or 12 immature plants. However, the limits can be exceeded if a physician explicitly specifies that more cannabis is required to meet a particular patient’s needs.
Despite a lack of dispensary laws at the state level, numerous city and county governments have taken steps to regulate such entities.
On September 11, 2015, California passed the Medical Marijuana Regulation and Safety Act. The new law, which comes into effect on January 1, 2016, will generate a comprehensive regulatory framework for the cultivation, distribution, sale, and testing of medical cannabis. The legislation gives exclusive delivery rights to dispensaries and provides grandfathering rights to existing establishments while they await a state licence. However, there is also latitude for regional authorities as they will still be permitted to enact local ordinances that prohibit dispensaries.
In 2010, Bill 1449 decriminalized possession of up to 28.5 grams of cannabis, making it an infraction punishable by a maximum fine of $100.
Cultivation, distribution, and sale of recreational cannabis remains illegal California.
Oregon
Oregon first ‘legalized’ access to and use of medical cannabis with a doctor’s recommendation in 1998 with Oregon Ballot Measure 67, becoming the second US state to do so after California’s Proposition 215 in 1996. Registered patients were issued permits through the Oregon Department of Human Services.
Originally the bill allowed for 7 plants, 3 mature and 3 ounces of dried cannabis. In 2005 the law was changed to allow six mature cannabis plants, 18 immature seedlings, and 24 ounces of usable cannabis, and also tightened rules around patients exceeding these limits.
All of this allowed for home production, but not commercial distribution or sale. Oregon didn’t legalize the distribution of medical cannabis ‘dispensaries’ until 2013 with the passage and signing of HB 3460.
It was this bill which has allowed for the framework of retail management of adult/recreational ‘dispensaries’. Some of those regulated dispensaries (those selected after following state rules and applying) have been chosen as the immediate distribution of recreational cannabis while the state manages the application process for fully recreational retail stores. The Oregon Liquor Control Commission will begin accepting applications for retail cannabis stores on Jan 4 2016.
In 2014 Oregon passed the Oregon Ballot Measure 91, legalizing “recreational use of marijuana, based on regulation and taxation to be determined by the Oregon Liquor Control Commission.” The official ballot title was “Allows Medical Use of Marijuana Within Limits; Establishes Permit System”.
Washington
In 1998, Initiative 692 legalized medical cannabis and allowed patients or their primary caregivers to obtain a prescription, from a licensed physician, to possess an amount of marijuana necessary for personal use, up to a 60 day supply.
In 2007, in response to a number of court cases, Initiative 692 was amended, with notable changes being an extension of the list of ailments that can be treated cannabis and setting the 60 day supply limit to a maximum of 24 ounces and 15 plants. In 2010, an amendment was made that expanded prescription authority to other health care professionals including: licensed physician assistants, licensed osteopathic physicians and assistants, licensed naturopaths, and licensed advanced registered nurse practitioners.
In 2011, further modifications were approved by the state legislature that included regulation of collectives, growers, and dispensaries and a patient registry system. However, Governor Christine Gregoire vetoed the provisions on the basis that they would make state employees vulnerable to federal charges (apparently federal authorities in the region advised that they could not assure prosecution immunity to state workers). As a result, dispensaries continue to be regulated by local governments and remain susceptible to federal raids.
In December 2012, pursuant to Initiative 502, it became legal for those aged 21 and over to possess up to 1 ounce of marijuana. However, the law does not permit home growing of recreational cannabis.
As the medical cannabis market in Washington was still largely unregulated at the time Initiative 502 was enacted, the state did not have an opportunity to utilize existing dispensaries for ease of implementation, as was the case in Colorado.
In the first year after sales of recreational cannabis began, Washington collected $70 million in tax revenue.
In July 2016, Washington will start granting medical cannabis sales licences to some existing medical dispensaries and to existing or pending recreational establishments that want to sell both.
Colorado
In November 2000, Colorado passed Amendment 20, which authorized patients or primary caregivers to possess up to 2 ounces of marijuana and 6 plants, with up to 3 of the plants being mature.
Cannabis dispensaries began operating in the early 2000’s. In 2009, after a number of legal disputes over how many patients dispensaries could serve, the Colorado Board of Health rejected the 5 patient limit proposal of the Colorado Department of Public Health and Environment, a decision that effectively endorsed the dispensary model.
In 2010, the Medical Marijuana Code (MMC) was enacted to regulate and licence medical cannabis dispensaries. Prior to this, dispensaries were only regulated by local authorities.
Under the MMC, existing dispensaries were allowed to continue operating while in the process of obtaining a state licence. In addition, the new law gave regional governments the authority to adopt their own licensing rules or to prohibit dispensaries completely. The legislation also specifies that patients must see a doctor in-person to receive a medical cannabis prescription.
In November 2012, Amendment 64 legalized the cultivation, distribution and sale of recreational cannabis and allows residents who are 21 and older to possess up to an ounce of the substance and grow up to six plants. In some local jurisdictions, possession rules may be different for non-residents. For example, in Denver non-residents who are 21 and older can only possess up to a quarter ounce of the substance.
During the first year of implementation of Amendment 64, retail sales licenses were only accessible for existing medical cannabis dispensaries or applicants with pending applications for a medical dispensary licence. The objective with this policy was to enhance enforcement capacity and gradually introduce recreational sales through experienced cannabis operations that were already known to the government.
In the fiscal year of 2014-2015, recreational cannabis generated approximately $100 million in tax revenue.
Canada
Responding to a number of Charter challenges, medical cannabis regulation in Canada started in 1999 with the Marihuana Medical Access program. This program provided an exemption to the Controlled Drugs and Substances Act for patients who had a recommendation from a physician to possess and grow cannabis.
In 2000, a court decision found that a particular medical cannabis patient had no practical legal way of obtaining cannabis. This case led to the initiation of the Medical Marihuana Access Regulations (MMAR) in 2001.
The MMAR established broader guidelines with respect to treatable ailments, allowed medical practitioners to specify dosages, and provided licences to produce for patients or a designated grower.
In 2013, the MMAR were replaced with the Marihuana for Medical Purposes Regulations (MMPR), which permits physicians or nurse practitioners to prescribe medical cannabis. The MMPR also introduced commercial cultivation and distribution of cannabis by licensed producers, which is then delivered to licensed patients by mail. Moreover, under the MMPR, personal growing licenses are no longer being allotted. However, individuals who held such licenses under the MMAR may continue to grow cannabis on an interim basis until a final court decision is made.
Store-front medical cannabis dispensaries have opened up across the country, with the City of Vancouver being the one of the first Canadian municipalities to regulate such businesses.
While Health Canada has expressed vehement opposition to dispensary regulation, Vancouver Mayor Gregor Robertson asserts that dispensaries have evolved due to limited patient access within the federal system. He has also noted the need for increased access through dispensaries must be regulated to ensure public health and safety standards within the industry.
The Canadian Association of Medical Cannabis Dispensaries is a trade association that acts as an advocate for its members with respect to regulation and sets guidelines that aim to maintain high standards of practice within the industry.
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