New pot laws could bust rural BC's economy

By Lisa Cordasco, September 2016

BC growers worry they will be cut out of the equation as governments move towards legalization.

Craft Cannabis' Teresa TaylorPRIME MINISTER JUSTIN TRUDEAU'S promise to legalize marijuana could cripple an underground economy in British Columbia that experts at Simon Fraser University’s Sauder School of Business estimate is worth $2 to $5 billion dollars a year.

“Cannabis is the economic backbone of most small towns across this province,” says Teresa Taylor, co-founder of “Craft Cannabis,” a BC-based group of small marijuana producers who supply dispensaries, medical marijuana patients and recreational users. The self-described “farmer’s daughter” is a second- generation pot grower from Grand Forks who claims she is not unique. “In my small town, I know many people who keep their legitimate businesses afloat by growing cannabis.”  

A study for the Cannabis Growers of Canada estimates up to 100,000 British Columbians are employed in the BC bud business, but its executive director, Ian Dawkins, says those jobs could go up in smoke. “Right now, we are absolutely excluded from this conversation by the federal government.” 

Dawkins says MP Bill Blair (the former Toronto Police Chief and current Parliamentary Secretary of Justice in charge of legalization) has refused to meet with his group. “Where would you ever have a trade organization of our size being completely frozen out of deregulating our industry?” asks Dawkins. He points out that Blair has sung the praises of Ontario’s licensed pot producers, while vilifying medical marijuana dispensaries by suggesting they sell potentially dangerous products. Dawkins says, “The federal government is trying to create a monopoly for the benefit of a few wealthy corporations, based in Ontario.”

Currently, Health Canada’s Medical Marijuana Access Program allows 33 licensed producers to grow and/or sell cannabis via mail order to the 28,000 Canadians who have government-approved permits to consume it. More than half of these large operations, with facilities ranging from 50,000-100,000 square feet, are in Ontario and have hired politically well-connected advisors, including former Prime Minister John Turner and former BC Justice Minister Kash Heed. Venture capital companies like the publicly-traded Canopy Growth Corporation and US-based Privateer Holdings are buying up federally-licensed producers, in anticipation of expanding into recreational production, where sales are estimated to be three times higher than the legally-sanctioned market. 

BC’s small growers (who currently dominate the underground market) are anxious about what Taylor calls “Prohibition 2.0,” where new federal regulations create a monopoly for large, licensed medical marijuana producers, backed by corporations with deep pockets. Dawkins says that will hurt thousands of otherwise law-abiding citizens.  

“If you go to Port Hardy, Trail, Castlegar, almost everyone works in cannabis. Forestry, mining and all these secondary industries have left these places, so people have turned to cannabis. It’s been employing people in BC for decades and if the feds change to a larger, licensed- producer model, what they’re doing is taking five, six, seven billion dollars of economic activity from rural British Columbia and transferring it to factories in Ontario. They will be destroying jobs. You can’t just move billions of dollars out of the province without an effect.”

Much will depend on a federally-appointed Task Force on Marijuana Legalization and Regulation. It will make recommendations ranging from who can grow and sell cannabis, oils and edible products, to how, where and whether they can be sold, as well as who can consume them for medicinal and recreational purposes. The expert panel of mostly law enforcement and medical professionals will report to the federal Ministers of Justice, Public Safety, Health and the Attorney General by November. Federal legislation is expected next spring. 

Despite its tight timeline, the Task Force has pledged to meet face-to-face “with municipal and provincial governments...and other stakeholders, including those groups with expertise in production, distribution and sales.” BC bud lobbyists hope that means the task force will grant them some face time. Meanwhile they are trying to convince the provincial government to ensure that small producers and dispensaries which are currently illegal have a place in the new federal regime. Dawkins believes they are getting some traction.

“The BC Liberals have been much more receptive to us than their federal counterparts. They understand jobs. This is not theoretical to them. They don’t want to go into an election in 2017 having lost hundreds of jobs in every riding. They know they have to figure this out and if they don’t, I am also meeting with the NDP and the Green Party who are very interested in turning this into a provincial election issue.” 

The Premier, BC’s Solicitor General, and the Minister of Health would not comment on the politics of creating cannabis policy, but the Ministry of Public Safety and Solicitor General provided a written statement, saying it has “created an inter-ministry committee of assistant deputy ministers from Health, Justice and Public Safety to identify concerns and to develop a provincial strategy.”  

It states: ”We agree with Prime Minister Trudeau that there needs to be appropriate restrictions in place around sale and distribution.” It does not elaborate on which “appropriate restrictions” it is considering or which level of government should enact them. “We can’t speculate what the outcomes will be but will monitor the federal government’s plan as it is developed.”

BC’s Green Party has wasted no time in supporting the small producers’ position, with its leader, Andrew Weaver, calling on the federal government to take a minimalist approach to legalization. “The feds should simply remove cannabis from their Controlled Drug and Substances Act and stay out of the business of saying who can or can’t produce it,” he says. “We favour policies that support a craft cannabis industry that is provincially regulated, tested, taxed and is local.”

The NDP’s public safety critic, Mike Farnworth, admits his party has no official policies on marijuana legalization yet, but he and the party’s health critic, Victoria MLA Carole James, have met with regulators in Washington State and have talks planned with BC cannabis groups this month. Farnworth says in broad terms, “The NDP supports a provincially-regulated system that is responsive to BC producers and protective of consumers.”  

A report by the Canadian Imperial Bank of Commerce predicts the federal and provincial governments will collect $5 billion dollars a year in tax revenues from the sale of legal marijuana. Farnworth is warning the Province not to view it as a cash cow. “If governments get greedy and the taxes are too high, you aren’t going to get rid of the black market,” he says. Perhaps the Province is signaling the same concern by stating it is “waiting for federal legislation before reviewing provincial tax treatment.” 

Craft Cannabis wants Victoria to be proactive by helping black market growers make the transition to become licensed, taxpaying businesses. “There are a lot of stereotypes that exist about cannabis cultivators, but we’re just farmers,” says Taylor. “And many will need a bit more support in becoming legitimate businesses because they’ve never had to track their product from seed to sale.” 

Taylor says the public health discussion has so far focused on negatives and unproven assumptions. She accuses many in the medical community, including BC’s provincial health officer, of overstating the dangers of cannabis. “Dr Perry Kendall has campaigned for a ban on edible marijuana products even though no one has ever died from a marijuana overdose,” says Taylor. The statement by the Solicitor General’s Ministry considers Kendall one of “British Columbia’s representatives on the task force, which government is relying on to provide a crucial public health perspective.” 

Travis Lane, CEO of the Victoria-based Internet Dispensary, hopes it won’t be the only public health perspective considered by federal and provincial legislators. Lane says, “Craft cannabis producers have their products tested in the same federally-approved labs used by the licensed producers. We don’t irradiate our cannabis, unlike federally-approved medical marijuana factories. We sell organically-grown products and conduct random testing for pesticides and metals which Health Canada does not require for medical marijuana.” Lane believes the feds should abandon regulating “medical marijuana” in the future, unless private insurers and provincial pharmacare programs agree to pay for the medicine and research is funded.

Craft Cannabis predicts if “a Reefer Madness mentality” prevails, only big corporations like Shoppers Drug Mart and government-owned liquor stores will be allowed to sell medical marijuana. Taylor says BC dispensaries “have created self-imposed regulations that include product testing, labelling, best-practices and a code of conduct that forbids sales to minors and bans consumption of cannabis on their premises.” The City of Victoria has followed Vancouver’s lead by creating bylaws and regulations that mirror how most dispensaries already operate.  

Judging from its statement, the Province seems happy to let Ottawa handle that hot potato. It says, “The federal government is responsible for any changes to cannabis policy and how it chooses to respond to the decisions by Vancouver and Victoria will have to be addressed by it.” 

BC’s small producers believe if the federal government opts for a highly-regulated regime, it will lead to the concentration of large production facilities in Ontario, and an ongoing underground market here. They are calling for a regulatory regime run by the Province that they claim would better support small communities across BC and generate new tax revenues from its largest, albeit illegal, agricultural product. BC “pot-repreneurs” like Travis Lane say they’re taking a public stand to fight for their survival, and are hoping the federal and provincial governments will do the same. Says Lane, “The governments need to understand we’re not going to stop growing because they regulate us out.”

Lisa Cordasco is a former CBC Radio news reporter and morning show host who has made Victoria her home for the past 25 years.