The Task Force’s Report and the Task Force’s Friends
On November 30, 2016 the task force provided their report on legalization to the government. A copy will not be released to the public until December 21. No one is supposed to have a copy, except, of course, the people who secretly got a copy. It seems the contents of the report may have been leaked to special friends of the task force in mid-November.
Through the leaks we have learned that the task force’s guiding principle is, apparently, shutting down the black market. The task force sees keeping prices low as a way to facilitate that ($8-10 a gram). Supposedly, Health Canada’s medical cannabis mail order system will be the initial format, but distribution will be eventually left up to the provinces. This means Ontario could have LCBO cannabis while BC gets dispensaries. ‘Sources’ say that all producers will have to be licensed by Health Canada, but they also say there may be some small home-growing allowed. That is not clear. We are told the task force travelled to Colorado and Washington and determined that the Canadian approach must be much more restrictive.
Low prices are a good way to undermine the black market. However, it appears the distribution system, depending on where you live, is going to be problematic. Nobody wants to purchase cannabis by mail. The mail order system combined with the heavy-handed approach to dispensaries in much of Canada guarantees more legal confusion, protest, and a vibrant grey market. That being said, until we see the actual report, most of this remains uncertain.
What is certain is that the apparent leak of this report highlights the intimate relationship between the Liberal Party and the licensed producers. On November 16 there was a suspicious spike in trading on publicly traded licensed producer stocks. That day the Investment Industry Regulatory Organization of Canada halted trading on six licensed producer stocks. Canopy Growth stock shot up and had their trading halted five times in one day. Conservative MP Alex Nuttall has raised concerns with the government about the leaks. Mr. Nuttall noted that Canopy Growth was founded by a former Liberal chief finance officer. Conservative MP Blaine Calkins raised similar ethical concerns about the cozy relationship between Liberals and the licensed producers. This problem is exacerbated by Anne McLellan’s conflict of interest. The task force is headed by Anne McLellan, but she works for Bennett Jones LLP, a law firm that promotes themselves as the “go-to advisers” for licensed producers. Mr. Nuttall has asked Justice Minister Jody Wilson-Raybould to investigate the matter. Mr. Nuttall and Mr. Calkins want transparency. Will our Justice Minister act?
- Paul Lewin, @PaulLewinLawyer
Copyright Lewin & Sagara LLP. All rights reserved.