Confusion over the dividing line between legal and illegal cannabis in Canada gave the public the wrong idea that dispensaries were running legitimate operations, according to ministerial briefing notes.

The Trudeau government will introduce a bill Thursday to legalize and regulate the recreational use of marijuana. If the bill becomes law, Canada will become the second country in the world after Uruguay to legalize growing, possessing and selling the drug for both medical and recreational reasons.

The bill, called “an act respecting cannabis" comes as hundreds of illegal dispensaries, some with prominent storefronts on busy downtown streets, have been operating in Canadian cities. Police forces across the country have been carrying out raids, sometimes on dozens of shops at a time.

“The proliferation of dispensary and online sale of marijuana” has created a “sense of perceived legitimacy amongst the public regarding these entities,” say the notes prepared for Health Minister Jane Philpott and released to National Observer under the Access to Information Act.

Health Canada officials also had a “proposed approach” to legalizing marijuana, although that approach has been censored for public release. Many passages in the briefing notes on legalization are censored.

A portion of a briefing note to Health Minister Jane Philpott regarding illegal cannabis dispensaries. Screenshot of document retrieved via Access to Information

Public 'confusion' flourished over where to get legal weed, says department

Medical marijuana is legal in Canada, but access, production and distribution is tightly controlled.

Health care practitioners must prescribe the drug and patients can obtain marijuana only three ways: registering with a licensed producer, registering with Health Canada to grow their own, or registering someone to produce it for them. Storefront dispensaries selling marijuana, whether for medical or recreational purposes, are not authorized.

Yet despite clear direction from the federal government on their illegality, they operate in a complex environment: Vancouver has moved to regulate dispensaries, for example, and some police forces openly question whether they should direct their resources elsewhere.

Craig Jones, executive director of the National Organization for the Reform of Marijuana Laws in Canada (NORML), said the department got it right. "People routinely suggest that cannabis is legal" to him, although it is still prohibited under criminal law, he noted.

Dispensaries have proliferated because of a mismatch between government and market forces, argued Jones.

"The government is trying to enforce one timetable against the pressures of the market, which runs according to its own logic, and will not be constrained by government preferences to follow a particular path on a particular timetable," he said.

Dispensaries have said they are merely filling a void in regulations and laws by offering unlicensed products in varied locations. Licensed producers, for example, cannot offer edibles like drug-infused soda, or provide the convenience of a corner store.

The dispensaries created public “confusion,” the briefing notes state, “regarding the appropriate means for legally accessing marijuana for medical purposes.”

In August 2015, before Prime Minister Justin Trudeau was elected, Health Canada says it began an operation to monitor marijuana advertising. Companies with continued non-compliance were referred to law enforcement," it notes, and the department continued to "educate" illegal vendors about the law.

The briefing notes to the minister were part of a binder of “hot issues” that Philpott was expected to tackle in the “early days” of her mandate.

The RCMP say it's too early to know what effect marijuana legalization will have on organized crime. File photo by The Canadian Press

Will legalization kill the black market?

The bill is expected to legalize the possession of up to 30 grams of pot and the growing of up to four plants per household, on or before July, 2018 nationwide, according to CBC News.

It will also lay down penalties for sales to minors and driving while under the influence, spell out the rules around marketing, and establish what role the provinces will play in regulating the product, including pricing, distribution and sales.

For Trudeau, the bill is an important step toward fulfilling a campaign promise. The bill is based on months of work by a government-appointed task force that presented its advice in December, as well as stakeholder consultations by the government’s point man on cannabis, Bill Blair, parliamentary secretary to Justice Minister Jody Wilson-Raybould.

The Conservative Party endorsed decriminalization at its convention, which would move possession of marijuana to a ticketable offence. Speaking outside the House of Commons Wednesday, Conservative public safety critic Tony Clement said he'll be closely examining the government bill. As Conservatives gears up to their leadership election next month, candidate Kellie Leitch has come out against legalization.

Limiting criminal profits is a key driver for Trudeau, who also says legalization will help restrict young people's access to the drug. But it is unclear what effect legalization will have on the black market.

"You don’t see people smuggling beer around high schools. Why would it be in 2017 that you could get more ready access to cannabis than you should have for beer?" International Trade Minister François-Philippe Champagne recently asked.

The RCMP, however, say it's too early to know what effect legalization will have on organized crime.

The Canadian Association of Chiefs of Police, which came out against allowing Canadians to grow marijuana at home, told the task force it expected criminals to "produce high potency strains" not permitted under the legalized regime, thereby enticing users back underground.

Former police officer Robert Poëti, now a Liberal Party member of the Quebec National Assembly, said Wednesday that legalization would not weaken organized crime's grip on the marijuana market.

NORML, however, thinks the black market has largely been abandoned by large, organized criminal elements, as they chase higher profits with other drugs, and replaced with much smaller operations that are producing for the dispensaries.

"Cannabis is large, and smelly, and hard to conceal in bulk," said Jones. "Whereas methamphetamine, heroin and cocaine are small, and compact, and extremely profitable compared to cannabis."

Health Minister Jane Philpott stands during Question Period in the House of Commons in Ottawa, Thursday, April 6, 2017.
Officials told Health Minister Jane Philpott that licensed producers of medical marijuana were complaining of an "uneven playing field." Photo by The Canadian Press

Health Canada says licensed producers criticized 'uneven playing field'

There are only 42 licensed producers in Canada, but hundreds of dispensaries, although some are part of a franchise, like Marc and Jodie Emery's Cannabis Culture shops.

The storefronts have resulted in “criticism" from licensed producers of an "uneven playing field," the Health Canada notes say.

Producers must comply with regulations similar to the pharmaceutical industry, it adds, and many "have reported that their longer-term viability is threatened by the unchecked growth of these illegal vendors of marijuana.”

The briefing notes also state that there was “very high” interest by other parties in obtaining a license to produce medical pot. As early as October 2015, the department had already received over 1,400 license applications and was getting “seven to 10” new applications a week.

It was reviewing 400 license applications at the time and was bombarded with requests from lobbyists and unspecified “members of Parliament” who were “enlisted” to find out the status of individual applications, says one of the notes. However, “the length of time required to assess an application is highly variable, but could take several years.”

The Globe and Mail reported Tuesday that the federal government is preparing to speed up its licensing process in order to boost the number of companies authorized to produce marijuana.

Health Canada's "proposed approach" to legalizing marijuana. The information was censored for public release. Screenshot of document retrieved via the Access to Information Act

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What the heck happened to the bullet points?

They were redacted, as stated in several places in the article.

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