Pallister’s marijuana plan doesn’t stir the pot

Hey there, time traveller!
This article was published 07/11/2017 (2912 days ago), so information in it may no longer be current.

Faced with a task he was unsure of and a deadline he deeply resented, Premier Brian Pallister unveiled a plan for the legal distribution and retail sales of cannabis that struck a deft political balance between public and private stakeholders.

It’s rare that the introduction of new government policy makes everyone happy, and it’s not clear yet whether Pallister has accomplished that goal in this instance — but it seems like he’s attempted to give all of the important stakeholders just enough to keep them from lashing out.

The plan will see Manitoba Liquor and Gaming Authority oversee the regulation of a legal cannabis market. Manitoba Liquor and Lotteries — operators of the province’s network of liquor marts — will take on the role of wholesale purchasing and distributing cannabis produced at federally regulated growers. Sales will become the purview of as-yet unidentified private retailers.

It’s not a revolutionary model; in fact, it’s nearly identical to the way the province manages relations with its tiny network of private wine stores. In that scenario, MLL is the only source of wines for the private stores. MLL sets the price, and then the private retailers are allowed to sell it for whatever they want.

When you look at the entirety of the plan unveiled this week, you have a fairly elegant balance between public and private interests that should keep controversy and conflict to a minimum.

The Manitoba Government Employees Union, which represents many MLL workers, was becoming quite vocal in demanding that cannabis sales be handled through government-run stores to ensure all of the profits were kept in the province. Having a Crown corporation staffed by unionized workers handling the wholesale end of the pot business does not go as far as some would like, but it should satisfy most of the union’s concerns.

Leaving the retail pot trade to the private sector should play well with business interests that are just now realizing that there could be big profits in legal pot.

For a government that is sagging in the polls and struggling on major files such as health care, a reasonably balanced pot plan that does not provoke the ire of any one constituency is a huge win.

But there are still some concerns, and many blind spots, in the plan as released.

We still don’t know at what age Manitobans will be allowed to purchase cannabis, or in what quantities. Similarly, we don’t know the markup that MLL will charge for its management of the wholesale business, or the taxes that will be applied.

Pallister at one point suggested the legal, government-regulated pot would be subject to the provincial sales tax, but could or would not say if there would be other taxes applied, as is the case with alcohol.

It’s not clear why these details have been left out. At several points, Pallister seemed to indicate that more details would be provided in the coming weeks, but could not explain why there was any delay at all in revealing the age at which people will be allowed to partake of legal pot.

Equally concerning is the extent to which Pallister continues to use the threat from organized crime as a guiding principle in his cannabis policy.

Pallister has repeatedly said the price of legal cannabis must be sufficiently competitive to drive the “gangs” out of the pot business. In pre-comments he made the day before his official announcement, Pallister issued a dire warning about the continued presence of organized crime in the cannabis industry.

“(Gangs) know how to adapt. The competition (with legal cannabis) isn’t going to go away,” he said.

It’s a fascinating assertion, but largely factually inaccurate. According to the most reliable research into the illegal cannabis market in Canada, most people buy their pot from small-time producers and suppliers with no criminal record and absolutely no connection to organized crime.

In finding a middle ground between the public and private sectors, Pallister has shown an ability to build a compromise that doesn’t give each side everything it wants, but does give everyone something.

This was the major finding of an April 2016 report produced for the federal government’s Task Force for the Legalization and Regulation of Marijuana. The report’s authors could not have been more clear in debunking the myth of the gang-directed pot trade.

“While the label of organized criminal may be accurately applied to a minority of the individuals involved in the illicit cannabis industry, the defining characteristics of the term are not applicable to the majority,” the report stated.

Further, the researchers found the motivations of the typical marijuana supplier were more diverse, and less nefarious, than many “unsubstantiated” reports and comments from news media and politicians.

“Those in the cannabis industry have diverse motivations, including supplementing income, reducing costs, pursuing business and personal interest, controlling quality and producing diverse strains, and avoiding the illegal market,” the task force study found. It added: “most of those involved in the illicit cannabis market are keen to be part of a legal market.”

Although there have been some concerns around organized crime in general, and motorcycle gangs in particular, muscling into the medical marijuana industry, law enforcement and academics that have studied the pot trade seem to agree criminal gangs of all kinds are abandoning weed and turning their attention to other, more profitable illegal narcotics.

All that means the biggest challenge Pallister will have is not keeping the price of cannabis low enough to drive out organized crime, it will be ensuring that legal, above-board producers and retailers can charge a high enough price to make it profitable and that government is able to get its piece of the action through taxation.

In finding a middle ground between the public and private sectors, Pallister has shown an ability to build a compromise that doesn’t give each side everything it wants, but does give everyone something.

The premier will need to remain steady on his tightrope as he forges ahead with the remaining details of his pot plan.

dan.lett@freepress.mb.ca