Canada can Learn from California Cannabis Stores as it Prepares for Legalization

Canada is set to legalize this July 2018 and still has a lot to learn from recent California legalization.

In California, a person over 21 can buy up to one ounce of cannabis at a time, and grow up to six plants for personal use. Depending on the province, legal age will be 18 or 19 in Canada, 25-30 grams can be purchased and up to four plants grown.  Despite personal use, there is a lot of preparation cannabis stores in Canada.

While California’s legalization has got a lot of media attention, the state has granted only 49 retail licenses so far. That means only six cities have allowed cannabis stores to operate, while more than 300 have blocked non-medicinal sales. This is a reminder that municipalities can – and will – throw a wrench into plans for retail stores, despite federal and provincial laws.

Cannabis stores looking at California for tax help
Legalized cannabis is grossing millions of dollars in taxes for states like Colorado and Washington, which allow for medical and recreational use. via HERB

California has imposed an excise tax of 15 percent on legal cannabis, in addition to state and local sales taxes (from which medical users are exempt), and cultivation taxes on producers. On Jan 1st. some were showing receipts with 26.75% in tax.

That means the in-store price – about $50, similar to the street value – for an eighth-ounce (3.5 grams) the f top-quality product will reach $65 after taxes. Canada is looking at a minimum price of $8 to $10 per gram, plus a $1 per gram excise tax. High-end strains will be pricier, about $15 a gram. This means Canadians will pay slightly less for cannabis than Californians.

Public or Private Cannabis Stores

Cannabis stores to run privately and publicly.
The Higher Path in California specializes in the finest selection of flower and cannabis concentrates on the market, as well as an array of CBD products. via Leafly

Canada will have a mix of publicly owned and privately run retail cannabis outlets. In California, it’s all about private enterprise, although priority for licenses is going to the “non-profit collectives”. “Non-profit collectives” have been able to sell medical marijuana legally since 1996.

Allowing existing outlets to expand beyond the medicinal market to the recreational one will give California a smoother transition to legalization. By contrast, some provinces, like Ontario, have declared war on dispensaries.

In fact, the most important lesson Canada can take from California is how to properly cater to consumers of cannabis.

It’s about the experience

Cannabis stores are looking for clean cut and less like a head shop
MedMen’s West Hollywood dispensary was consciously modeled on the Apple Store. via CBC

The cannabis stores that have opened in recent days all have one thing in common: They look more like Apple stores than head shops.

“Bud-keepers” in matching uniforms tend to consumers, who shop for products principally by choosing from a menu displayed on an iPad. Some stores even had “bud-pods” which are sealed sample jars allowing customers to sniff the merchandise. And they also offer home delivery.

In Canada, the planned outlets seem very strict in comparison. Products hidden in locked cases and nothing as radical as home delivery allowed (unless you buy online.) This may change as legalization moves forward.

Then and Now

Cannabis Stores hope the future will work in their favour.
Marijuana is becoming the new future for microdosing, medicating and for recreational use. via Kind Land

In the early days of cannabis legalization in California, flowers, buds, and oils were widely used. In addition, consumers are going for edibles like candies and honey, vapor pens, and topical lotions. One of Canada’s big flaws is the delay in the legalization of edibles.

The majority of customers in California’s new retail outlets were middle-aged or older. This comes as a reminder that those drawn to mainstream stores want to buy marijuana without the legal risk.

With legalization, Canadian law will finally catch up with culture. The next step is for our legislators to allow the retail environment to meet consumer demand and expectations.