A comparative analysis of cannabis regulatory options

in Colorado, Washington State and Uruguay

Findings from the CANNALEX study (2015-2017)

& evidence for future drug policy

Ivana OBRADOVICDeputy Director

With the CANNALEX team :

Michel GANDILHON

Nacer LALAM

David WEINBERGER

Déborah ALIMI

ISSDP Vancouver

May 16th-18th, 2018

Update on the current cannabis legalization initiatives

Since 2012, 8 American States have legalized the cultivation, sale, possession and use of cannabis for recreational purposes (adults) : Colorado, Washington State, Oregon, Alaska, California, Maine, Massachusetts, Nevada (+ Washington DC & Vermont, except sale)

= 1 inhabitant / 5 (65 million citizens)

December 2013 : Uruguay became the first country in the world legalizing bothproduction/distribution of cannabis & recreational use

= 3,5 million inhabitants

Starting in July 2018 ? Canada

= 36,3 million inhabitants

→ By the end of 2018 : 105 million inhabitants living in an area where access to cannabis is legal

2

Reform goals

Common goals :• Neutralise the black market and fight drug-related violence & criminality• Make production, sale and purchase conditions safer• Limit access to cannabis for young people (protection of minors)

Major differences :• Fiscal interests & civil liberties / racial issues (US) vs Public health and risk education (Uruguay)• For profit, business-friendly model (US) vs State control = demonetise the issue (Uruguay) • Alignment of medical & recreational markets (US)vs eradication of ‘prensado’ & ‘pasta base’ among young people (Uruguay)

2

Policy models & regulation regimes

w w w . o f d t . f r

COLORADO

(5,5 M inhab.)

WASHINGTON STATE

(7,3 M inhab.)

URUGUAY

(3,5 M inhab.)

Minimum age 21 21 18

Personal possession

quantity

28,5 g

(1 oz)

28,5 g

(1 oz)

40 g / month

Home growing 6 plants

(3 of which can be flowering)

Prohibited at first Up to 6 plants (480 g / year)

Supply State-licensed stores

500 retail stores

State-licensed stores

546 retail stores

Up to 556 (including the MMJ

providers)

3 exclusive routes(self-cultivation, cannabis social

clubs, purchase in pharmacy)

8 450 registered home growers

90 cannabis social clubs

A dozen licensed pharmacies

(out of 1 200 in the country)

Market limitations Vertical integration

2 years of residence

No vertical integration

3 months of residence

No vertical integration(2 production licenses, 2 varieties)

Regulatory authority Marijuana Enforcement Division

(Department of Revenue)

Liquor & Cannabis Board

(formerly Liquor Control Board)

Instituto de Regulación y

Control de Cannabis (IRCCA)

Recreational MJ

tax rates

30% (upgraded in July 2017) 37% excise tax

+ State and local sales taxes(after a system of taxation of

25% at each level)

VAT

What are the legal cannabis access models like ?

Denver, Colorado Seattle, Wash.State

In Uruguay

19 July 2017, Montevideo

Two heterogeneous pathways to reform (US/URU)

w w w . o f d t . f r

COLORADO WASHINGTON STATE URUGUAY

Legal process Local referendums

(November 2012)

Government & Parliament

(December 2013)

Amendment 64 (55%) Initiative 502 (56%) Ley n°19.172

Task Force (8 months) Long-term process Implementation in pharmacies

delayed (July 2017)

Medical cannabis 2000

(Amendment 20 : 54%)2 oz

6 plants

Residence condition

1998

(Initiative 692 : 59%)24 oz

15 plants

Residence condition

2015

(Decree)

URU & US: Crime Road safety (cannabis-related driving fatalities) Teens’ marijuana use & perception of harm

+ US : Taxes Jobs Marijuana-related emergency department visits Tourism Private security Real estate Economy (‘the rising cannabusiness’)

What indicators are being monitored ?

Outcomes of cannabis policy change

COLORADO WASHINGTON STATE

Sales $304 million (2014)$577 million (2015)$861 million (2016)$1,1 billion (2017)

$600 000 (July 2014-July 2015)$259 million (2015)$786 million (2016)$1,3 billion (2017)

Taxes, license &

fee revenues

$67 million (2014)$130 million (2015)$193 million (2016)$247 million (2017)

$70 million (2014)$200 million (2015) $160 million (2016) $300 million (2017)

Cannabis use Prevalence of use decreasing among minorsRising in adults

Harm perception Decreasing among minors

Emerging issues

& controversial

topics

Increasing calls to poison centers, ED visits & hospital admissionsDecreasing cannabis abuse admissions

Banking issues (risk of prosecution for money laundering)Health security (pesticides)

DUIAdvertisement & marketingPersistent racial disparities

Prevalence of recent cannabis use

Minors (12-17) Young adults (18-25)

Major impact = normalization« I would say that the rollout was extremely smooth, the sky hasn’t fallen likesome had predicted and we’re moving forward and trying to fine tune thisregulatory model »Ron KammerzellDeputy Senior Director of enforcement for the Colorado Department of Revenue

Adjustments« We’re building the airplane while we’re in the air »Barbara BrohlExecutive Director of the Colorado Department of Revenue

So far so good ?

Conclusion - Perspectives

No major turning point but incremental change : to be confirmed !

The cannabis prohibition model fading away ?

Only one in four American states implements cannabis prohibition policies as stipulated by US federal law : conflict between federal & State laws

The nature of the challenge has changed : this is now a financial and industrial issue rather than a political and diplomatic concern.

Market dynamics & democratic issues

The key issue of price & availability : $ 1.40 per gram in Uruguay vs $6-9 per gram (Wash. State & Colorado)

The challenge of competing with the black market An anti-trust & anti-capitalistic policy ? Can small businesses survive in the US legal MJ

markets ?

Social (& racial) disparities : is legalization the adequate device for reducing social inequalities ?

Thanks for your attention !

Photo credits :Slides 5, 6, 7 : ©Ivana ObradovicSlide 8 : ©kushtourism.com, ©visitseattle.org, ©colorado.uli.org.,©magazine.grasscity.com, © evermine.comSlide 9: ©cbc.ca, ©Frederick Bernas, ©apimagesblog.comSlide 10: ©ndtv.com, ©elpolitico.com

Publications and full report of Cannalex available online :

www.ofdt.fr