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Baked Goods

Blame Canada

You’re screwing it up for everybody

By
Baked Goods logo
Rob M.

Canada's recreational cannabis shops opened their doors earlier this month only to sell out of their stock almost immediately—some within hours. Most of the country has been dry for weeks (well the legal market, anyway). The Canadian government is reportedly scrambling to issue producer licenses and deal with the situation, but the severely dysfunctional distribution system has highlighted some problems and done some damage to the international “industry,” as it is.

Marijuana stocks, which were doing so well on the way toward Canada's legalization plummeted following the realization that producers wouldn't be pumping out product at the rate they'd promised. Within a week, according to the Motley Fool, cannabis stocks dropped into what's called a “bear market” (they fell more than 20 percent after a major peak). Historically a bear market will perpetuate itself as investors lose more and more confidence and stocks spiral. Watch out, dear reader. Legalization in the US might not be so inevitable anymore. This will almost certainly suck the energy out of my argument that a legal cannabis market would make the country rich.

Worse still, there's been a subsequent boom for Canada's marijuana black and “gray” markets. Business Insider says the shortages have led many to turn to illicitly sold cannabis—some from illegal shops that have brazenly opened their doors—which is reportedly and unsurprisingly easier to get than the legal kind. Considering the promise that legalization would choke out the black market, this blunder could undermine marijuana advocacy in the US for years to come.

This is especially frustrating as Mexico's Supreme court just issued two rulings last week that effectively decriminalized cannabis and will likely lead to full legalization. The Mexican Congress was given 90 days to make the country's marijuana laws line up with the rulings.

As a friend of mine pointed out last night, North America has become a marijuana sandwich with a soggy, disgusting chunk of meat in the middle. We might just have to eat it.

Plant Limit Deemed “Arbitrary” by Judge

And Canada's debacle might very well have been on the mind of state District Judge David Thomson last week when he ruled that the state Department of Health’s 450-plant limit for medical cannabis producers wasn't actually based on facts and should be reevaluated.

Yes that is the sound of a heavenly choir rejoicing in your ears.

The original limit for producers was 150 plants, which was increased in 2013, but people were grumbling even then that it wasn't going to sustain the market. Following that, all attempts to increase counts through legislation have been failures.

But a lawsuit brought against the DOH by plaintiffs Nicole Sena and Ultra Health CEO Duke Rodriguez that accused the department of failing to secure an adequate supply of medical cannabis for Sena's infant daughter might finally force their hand. Sena's daughter suffers from a rare form of epilepsy that's being treated with CBD oil. Sena says she had to move to a “neighboring state” to gain access to the medicine. A bench trial for the suit ended in Aug. 2017.

Judge Thomson's ruling was that the DOH was using its authority to “impede” the state's medical cannabis laws, which requires the state to provide an “adequate supply” of cannabis for patients and caregivers. He also said the 450-plant limit was “not based on fact or reliable data and is not rationally related to its regulatory authority.” The DOH's authority over plant count would be upheld, however, “as long as such count is based in fact and does not impede the purpose of the [Lynn and Erin Compassionate Use Act].”

The department was given 120 days to come up with a better number and comply with the laws. A DOH spokesperson reportedly told the Albuquerque Journal that the department was considering its next steps.

DOH Spanked Again

Last month the DOH was ordered by Chief Judge Louis P. McDonald to provide official designation as distribution sites for two Ultra Health dispensaries and to process future requests from the company “in a timely and legally compliant manner.”

According to Ultra Health's petition, the DOH was withholding designation for its Los Lunas location allegedly because it's located inside a senior living facility. Its Española dispensary wasn't seeing designation because the company supposedly was unable to show that it could stock a new location with product. A press release from the company claims it’s been waiting for the official designation of locations in Albuquerque’s North Valley, Farmington, Deming, Las Cruces, Sunland Park and Roswell “for several months.”

The judge ruled that the department had to immediately designate both the Los Lunas and Española Ultra Health stores and to issue license amendments for “any and all past/future applications” that meet statutory criteria. It also criticized the department's reasoning for withholding the designation as not being based on the Lynn and Erin Compassionate Use Act.

The ruling also clarified that the DOH does not have discretion in handing out distribution site designations once the statutory requirements have been met by a producer. The department is reportedly considering an appeal.


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