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Regulation killing weed industry’s high

On the fifth anniversary of weed legalization, St. Albert cannabis industry players say they’d like to see rule changes to make pot more profitable.

Five years into pot legalization, players from across St. Albert’s cannabis industry agree that regulation has made dealing in weed less profitable than first imagined, and some of the buzz at the outset of legalization has failed to generate much of a high.

However, they say that they’re still optimistic about where the industry could go in the future.  

Otis Quinn has worked on the retail side of the cannabis industry since the start of legalization. Currently, he works at The Wanted Leaf, one of only two stores in St. Albert that don’t belong to a franchise or have locations outside of the city.

He’s noticed that rules around how much cannabis a customer can buy at one time and limitations on the THC concentrations available for edibles have driven away some demand for legal pot.

“It just feels like we’re five years in and still playing it a little too safe,” he said.

Quinn said he has seen many shops come and go as franchises such as Canna Cabana and Plantlife replace smaller independent shops. Currently, St. Albert has 13 cannabis stores.

“It's kind of sad watching a number of the stores close down, but if the total product price comes down then I'm for it,” he said.

Erin Cassidy runs St. Albert-based Lit Up Cannabis Creative, a marketing agency specifically for cannabis products.

The gig comes with a unique set of challenges, according to Cassidy, who has worked in marketing for 20 years.

Packaging for products is limited to certain colours, and design flourishes such as holograms are prohibited. Producers can’t advertise cannabis through traditional channels such as Google search ads or newspapers. Instead, they must rely on alternatives like user-generated content, in which content creators on sites like YouTube review products, Cassidy said.

“Every cannabis brand’s story seems to be the same; there’s not a lot of budget to go around,” Cassidy said. “So it’s just about getting creative…. The beautiful thing is how supportive people are.”

Cassidy said that she hopes policymakers consider revising some of the regulations around cannabis by looking to markets in the US.

“If there was room to revise those regulations so that when a consumer walks into a cannabis store they can be met with incredible product branding and great packaging that supports brand recognition — it would be amazing for brands, consumers and our investors.”

Jill Ozero is one of Cassidy’s clients. Her company, Blunt Botanicals, makes cannabis-infused skincare products.

Although her products aren’t intoxicating, Ozero said that she had to go through the same regulatory hurdles that cannabis edible producers experienced. That’s because the ointments contain THC, the compound that gets users high.

“If there’s a hoop that’s been invented, we had to jump through it,” Ozero said. “We've gone through financial hurdles, licensing hurdles, selling hurdles…. There’s no platform that connects the manufacturer to the stores — you have to forge your own path.”

She’s been working in the industry for 10 years and had her product ready to go at the time of legalization.

Initially, small producers had to fend for themselves when it came to interpreting rules about their products, she said.

“If we did it wrong, we would get fined, or they would send everything back,” she said

In the past five years, Ozero has found that clarity around regulations has improved and getting her products on the market is less of a hassle.

“Now we have more of a roadmap for exactly how to do things and then it's less costly for mistakes.”

But despite these improvements, Ozero said working in the industry hasn’t been as lucrative as the hype indicated five years ago.

“I definitely lost a lot of money in the beginning,” she said

“Most in the industry have been on a life raft; I haven't seen many on a yacht so far.”

Dale Nally, Minister of Service Alberta and Red Tape Reduction and MLA for St. Albert - Morinville, said the problems with Alberta’s cannabis industry come down to “five years of bad policy at all levels of government.”

“We’ve seen producers like Aurora that have left the province … and some others that have closed up shop,” he said. “It's becoming obvious to us that the best thing that we can do for the cannabis industry is to get out of their way.”

Meeting with cannabis industry members, Nally said the message is clear: producers and retailers want their product treated more like liquor. “We continue to treat them … as if we’re still in a period of prohibition,” Nally said.

He pointed to actions he has already taken to improve regulation, such as reducing shipping fees for retailers and reducing listing fees for licensed producers.

But he expects it will take time for Health Canada to change rules around the THC concentration limit per package of edibles.

“Anybody who enjoys cannabis will tell you that 10 milligrams of THC just isn’t enough,” he said. “[It] is a significant roadblock to the industry being successful.”

He added that over-taxation is harming the industry.

“We are looking at everything and we're not going to leave any stone unturned. If it's a case of overregulation or duplication of regulation, or even unnecessary regulation, we're going to get rid of it and provide some relief to the industry.”

Cannabis became legal in Canada on Oct. 17, 2018.

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