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The Observer Cannabis Growers have gone bust, and the black market is still thriving
Sun 5 Apr 2020
The lights shone more brightly than anything I’d ever seen. One million blinding watts strafed across the leaves of countless cannabis plants that peeled off in neat rows in every direction. The warehouse was as pristine as a pharmaceutical facility, and as we strode around in crisp white nylon overalls and box-fresh wellies, the atmosphere was surreal – interstellar, almost: – it felt as if we were on a mission to Mars. It was definitely a glimpse of the future.
It was 2017 and I had been invited to visit this legal medical cannabis “grow” in the town of Gatineau, near Ottawa. I was in Canada after writing a paper for the drug-law reform thinktank Volteface, proposing an online-only, legal cannabis market in the UK as a way to break the logjam between the UK’s two million cannabis smokers and those who fear legalisation. I was meeting with Canadian police and politicians to hear more about that country’s plans to completely legalise cannabis the following year.
Back in the UK, a million-watt grow like Gatineau’s would put you in jail for a decade. Here, it was likely to make its owners a very cool, very legal few million in mere months. Added to that, the state would benefit, too, as taxes from sales of the crop would be collected for the common good rather than enriching criminals. It felt utopian.
Canada’s Cannabis Act of 2018 was a bold attempt to impose some order on this anarchic retail scene. It legalised the sale to adults of 30g of cannabis in austere packaging from government-licensed shops. Canadian prime minister Justin Trudeau said: “The old approach to cannabis didn’t work. It was too easy for our kids to get it and gangs and drug dealers were reaping the profits. That changes from now on.”
Bill Blair, a former Toronto police chief, became an unlikely cheerleader for legalisation, arguing that to do so would “keep cannabis out of the hands of youth, and profits out of the hands of criminals”. Two other key goals of regulation were the protection of public health and the reduction in criminality associated with the illegal market. After 50 years of the unending, senseless drug war, peace had broken out.
Or so it seemed. Because while Canada may have lit the fuse on an ambitious experiment, every high has a low. Within a year the industry was experiencing mass layoffs, multi-billion-dollar stock-market losses, executive firings and corporate scandals as the overhyped new sector experienced a dramatic and humbling public correction.
Hype talks, but money walks. The early euphoria in the cannabis stock market has been replaced by a major dose of paranoia. All cannabis stocks have tanked, with an average 50% wipeout in value right across Canada and the US in the last year. Major players such as Aurora Cannabis took the biggest hit, with its shares falling from US$12.83 in March 2019 to US$2 today. Another bud behemoth, Tilray, has also had its share price slashed by 80%, from over US$81 to US$16 within a year. Other cannabis giants including Aphria lost 60% of their paper value in 2019, while Canopy Growth sank by 54%. Financing has dried up for the new industry, and small-scale retail investors – often young professionals investing via smartphone apps – have lost large sums of money. None of this is to assert that Canada’s policy has been a failure. If we compare it to the UK cannabis industry, where illegally trafficked children have been found enslaved in abandoned buildings growing cannabis for gangsters, it is better by several orders of magnitude.
What happens if you just legalise this drug? It’s a question no one other than Canada has ever really asked. My view is that we have long known that all drug laws are unworkable, illogical, unjustifiable, unscientific, counterproductive and generate countless unintended consequences – in fact, drugs laws often create the exact opposite outcomes to those desired. But ironically, and with a beautifully stoned logic, it turns out that legalising cannabis in Canada has generated just as many challenges as it solved.
Also see And Then There Were Three – Cannabis Markets That Is?
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North America’s biggest companies have seen their market values lose billions, prompting comparisons to dotcom bust
18th March 2020
Cannabis may be legal in Vancouver but visitors looking to score are likely to run into a seemingly counterintuitive suggestion: try the black market. Recreational marijuana was legalised across Canada in October 2018. And yet on Reddit, the specialist forum website used by millions every day, many of Vancouver’s cannabis connoisseurs still swear by their underground supply. This is one of the major issues facing North America’s marijuana companies, which experts say are in the midst of a dotcom-style market crash. (SEE And Then There Were Three – Marijuana Markets)
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- PMID: 32187114 DOI: 10.1097/ADM.0000000000000638
Abstract
Objectives: Cannabis is a known teratogen. Data availability addressing both major congenital anomalies and cannabis use allowed us to explore their geospatial relationships.
Methods: Data for the years 1998 to 2009 from Canada Health and Statistics Canada was analyzed in R. Maps have been drawn and odds ratios, principal component analysis, correlation matrices, least squares regression and geospatial regression analyses have been conducted using the R packages base, dplyr, epiR, psych, ggplot2, colorplaner and the spml and spreml functions from package splm.
Results: Mapping showed cannabis use was more common in the northern Territories of Canada in the Second National Survey of Cannabis Use 2018. Total congenital anomalies, all cardiovascular defects, orofacial clefts, Downs syndrome and gastroschisis were all found to be more common in these same regions and rose as a function of cannabis exposure. When Canada was dichotomized into high and low cannabis use zones by Provinces v Territories the Territories had a higher rate of total congenital anomalies 450.026 v 390.413 (O.R. = 1.16 95%C.I. 1.08-1.25, P = 0.000058; attributable fraction in exposed 13.25%, 95%C.I. 7.04-19.04%). In geospatial analysis in a spreml spatial error model cannabis was significant both alone as a main effect (P < 2.0 × 10) and in all its first and second order interactions with both tobacco and opioids from P < 2.0 × 10.
Conclusion: These results show that the northern Territories of Canada share a higher rate of cannabis use together with elevated rates of total congenital anomalies, all cardiovascular defects, Down's syndrome and gastroschisis. This is the second report of a significant association between cannabis use and both total defects and all cardiovascular anomalies and the fourth published report of a link with Downs syndrome and thereby direct major genotoxicity. The correlative relationships described in this paper are confounded by many features of social disadvantage in Canada's northern territories. However, in the context of a similar broad spectrum of defects described both in animals and in epidemiological reports from Hawaii, Colorado, USA and Australia they are cause for particular concern and indicate further research.
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First published:20 February 2020
Abstract - Findings: the initiation of recreational cannabis commercialization was associated with 5.06–5.80 more exposures per 1 000 000 population per quarter (67–77% increase relative to the pre‐legalization average), depending on the composition of comparison states. The increase associated with commercialization was higher among minors than adults (7.97–9.53 versus 3.83–4.21 more exposures), higher among males than females (6.16–7.56 versus 3.76–3.91 more exposures) and higher among exposures with medical consequences than those without medical consequences (4.09–4.79 versus 0.97–1.01 more exposures).
Conclusion: An increase in cannabis exposures reported to the US National Poison Data System was observed following recreational cannabis commercialization in the United States.