On Thursday, April 13 the federal government introduced legislation that provides some regulation for the production, sale and possession of marijuana. This follows several years of promises from the Liberal Party of Canada to be the first G7 country to legalize recreational marijuana.
Over the coming months, the federal government will further specify regulations governing how marijuana is grown, sold and consumed. For the moment, the feds indicated that under the new regulations all persons in Canada must be 18 to consume marijuana; a household can grow up to 4 plants per person for personal use; and an individual will be able to carry up to 30 grams of dried marijuana in public.
What does this mean for co-operatives?
In short, opportunity. The legalization of recreational marijuana creates opportunity for economic growth across Canada.
The CD Howe Institute suggests that under the current taxation system, governments could yield approximately $675 million in direct tax revenue, which accompanies benefits accrued through production, distribution, potential tourism and sale of paraphernalia. The cumulative total could be anywhere between $12-22 billion annually.
Considering the co-operative sector’s proven strength in retail, distribution and agriculture, there should be a variety of opportunities to capitalize on by new start-ups and existing co-ops alike.
Could Canada’s first grow-op co-op be just around the corner?
Regardless of how it is consumed, marijuana is an agricultural commodity requiring production and numerous expertise to create a high-quality good. At a press conference announcing the legislation, MP Bill Blair stated that new regulations need to ensure Canadian produced marijuana is “Competitive in price, quality, and access.”
While there are many primary industry opportunities to create co-operative businesses that capitalize on the production, distribution or tourism of legal recreational marijuana, secondary industry co-operative businesses in retail and service could also take advantage of this opportunity. Perhaps there’s even potential for a platform co-op.
Think outside the box
At a community meeting in northern Alberta, we had fellow suggest that there is great potential for developing Canada’s first Grow-op Co-op, especially for First Nations and Indigenous communities. Pooling resources, such as land, labor and experience, would allow growers to create a unique product.
The legalization of pot is a significant opportunity for communities with large untapped land resources. But creating spin-off developments through the attraction of tourists seeking to experience legal marijuana and Canada’s natural landscape could also yield considerable benefits for communities.
It's here. May as well use it to your advantage.
Regardless of your opinion on the consumption of marijuana, its legalization by the federal government creates a significant opportunity for Canadian business. Canada could lead the market for marijuana production as more states and countries create similar legal provisions. Our blog on Budget 2017 highlighted this government’s push to encourage innovative approaches to economic development. The legalization of recreational marijuana is a new platform to facilitate innovation and build on Canada’s agriculture industry.
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