 Let's talk about cannabis legalization in Canada. Sure. Can you tell us the story of how cannabis was legalized in your country? Well, the discussion around legalization goes quite far back to the late 60s, early 70s. And it's something, I think, that has been on the table of all three major parties at one time or another. It slowed down in the 70s because other political events took over, but was reinvigorated when the current Prime Minister was deciding to run for office. And he had chosen cannabis legalization as one of his key platform pieces. Subsequent to that, he won the election. A bill was passed and cannabis was legalized in Canada in October 2018. It's almost five years ago today. That's a pretty long time to tell. How does it work? Well, most of those years in between were nothing years. I mean, nothing happened. It was completely off the radar. But I think in the years since, let's say, the 2016 UN gas, the UN General Assembly special session on drugs, between that year and the 2018, there was an extraordinary amount of discussion, not just in Canada, but also at the Commission on Narcotic Drugs, the CND. So there were a lot of opponents to this, a lot of pressure on Canada not to pursue this avenue. And to their credit, they continued on the path. Can you describe the system of regulation of cannabis in Canada? Well, I think that's a tough one. But generally speaking, cannabis is legalized at the federal level. And you're able to possess up to 30 grams of cannabis in public, 30 gram dried herb weight. Anything above that, you're subject to, say, a small fine to up to 14 years in prison, according to the Cannabis Act. Cannabis is, in terms of the organization of the retail market, is done differently in each of the 13 provinces and territories. Much like other programs in Canada, the nature of our confederation is that the central government has some powers over certain things. So in this case, they legalized cannabis and passed the Cannabis Act. But filling in the spaces of the structures created by that act was left to the provinces. So in some provinces, for example, the age at which you can purchase cannabis is 18. The acts set the minimum at 18. In others, it's 19. It could be 21. It's up to the provinces. So many provinces tried to align it with their age of majority for alcohol as well. But generally speaking, in the province, you have one supplier, which is the provincial government. And they are responsible for supplying cannabis to all of the retail stores that they license. And producers can only sell to the provincial government as a supplier. So you get a license as a producer. You produce according to a specific set of quality standards. You provide your product to the government who buys it from you and then they ship it to the stores. If you want to operate a store, you apply for a license and then you can open a store. You can only buy cannabis from the government. So that's generally speaking how it's organized. The estimated revenue from cannabis in Canada this year is somewhere around 3.7 billion Canadian dollars. And the amount of tax that the government reported recouping in the last fiscal year, I think, was around 1.6-1.7 billion. Explain it to outsiders. What happens when you walk into a store? Like, should you show your ID? What do you see? Nothing. What happens when you walk into any retail store? It's very much oriented around a basic retail model. It's no different from when you walk into a store that sells beer or alcohol. That they will ask for your identification if they suspect you're underage. So you have to reach the age of majority to make the purchase. Otherwise, just like any other store, you go in, you shop around, you ask questions. They'll have many, depending on the shop, they could have many varieties of herbal cannabis that you can choose from. Different levels of THC or CBD. It's just, I think, a normal retail experience. I think, roughly nationwide, there are about 3,750 plus cannabis stores. I say plus because they're always licensing new stores. It's a continual process of application, license, and implementation. And in the province of Ontario, I think that number is around 17 or 1,800. I can't remember exactly. But again, plus, so they're continuing to grow. They're concentrated in urban areas, largely. So there is an argument that access to cannabis in the rural areas, where there is quite a lot of use, is more complicated than it is in the rural areas. But that's a challenge that the government continues to try and find solutions to rectify. Canadian model was criticized for many reasons. And you were also speaking about the shortcomings of this model in your presentation. Can you explain us? Well, I think one of the greatest disappointments was the issue of social justice. And what I mean here is there was a promise by the Prime Minister when they were discussing the development of this act and then this legalization process was that they would expunge all of the previous convictions people had had for cannabis possession or cannabis use. And they would go through and make sure within the first couple of years that this was done. Unfortunately, the way that legalization has worked out, that hasn't happened. Now, the government says that that is because it's just too difficult to go through the records and identify who was convicted for possession of cannabis versus possession of heroin because the conviction doesn't specify the substance involved. Now, another might argue that the government put an extraordinary amount of resources invested in prosecuting the war on drugs, pursuing those arrests in the first place. Why wouldn't they subsequent to the new legislation put as much effort into writing the wrongs that they'd created? But their middle ground was to sequester. That's their word, these records. So try and isolate these records from the wider criminal justice system and then decide what to do with them after that. The second issue is First Nations. I mean, First Nations peoples have been discriminated against, marginalized, abused, subject to in some cases horrifying treatment by the government over the couple of hundred years that the country has been in existence. And there was a promise that they would be centrally involved in the process of designing the legalization regime and they were unfortunately excluded to a large degree. And now the government's trying to play catch up by backing up the process and trying to bring them in, but the horse is out of the barn as it were. Legalization is out there and to come back and say, oh, by the way, we value your opinion is, I think, too little, too late. At the beginning, I think there were visions that small cooperatives, legacy growers and others would be able to find a way to participate in the new cannabis economy. But I don't think it's worked out the way that we had envisioned. I think the challenge we have now is large multinationals are coming in, buying up smaller companies and dominating the production landscape. Now, whether this is going to create a space much like the craft beer market where some smaller producers can come together and differentiate themselves from the large corporations by creating niche brands or niche products and get those into the market, I'm not sure. But I do think we're at a moment in the way the industry is organized that something like that needs to be explored because we face a real risk of large companies dominating the cannabis industry in the same way big tobacco dominates and big pharma dominates. And that's not the model I would argue was envisaged when the Prime Minister first said we need to legalize and regulate cannabis. So opponents like claim before legalization that after legalizations the sky will fall like tons of young people will try cannabis and all this stuff. What do you see after five years? There have been a few studies that have looked at that. Certainly the dramatics around, oh my gosh, young people are going to start consuming cannabis by the bucket load. Surprise, surprise, young people have been using cannabis for years. So what they discovered in a couple of the studies that have recently come out is that there's been no real change in the level of cannabis use among younger people that the use prior to legalization is largely the same post-legalization. So those who were using and the percentage that we're using, they didn't really change. What they did find out though was that there was a significant increase in use among older people. So adults who hadn't necessarily in the past admitted to cannabis use were now exploring cannabis use for a number of reasons. So the drug war kind of prohibition, the sky will fall if this comes in, is not necessarily proving true as we move forward. And we're seeing, at least in the beginning, we're seeing an approach to cannabis by the consumer population in the same way that I guess they would approach any other commodity in that sense. Some are interested, some not so much, some continue to do what they did before. Any other impacts of legalization in terms of public health or security? We're still learning every day, right? We're only five years into it. And there's only three countries in the world that have a legalized retail market. And the market in Canada is by far the largest. Now in saying that I exclude the U.S. only because cannabis has been legalized in some states or a number of states. But federally speaking, the U.S. has not legalized cannabis. So it's an environment in which there's not a uniform legalization process in place whereas Canada is legal from sea to sea to sea. I think one of the challenges that exists and about which we know too little right now is what is the impact on organized crime and on the illicit producers. That was one of the three components that the Prime Minister had said at the beginning. He wanted to address was to reduce the share of the black market and the funds that were going to the black market. So we know today that roughly 70% of Canadians are buying their cannabis from legal outlets. And most of them say the reason they do that is because of the perception of quality of legalized cannabis because of the standards that are required. But that still leaves about 30% of people who are buying it on the black market. And there are a variety of reasons why they're doing this. So the black market still exists. Its share of cannabis maybe is less, but they're still producing cannabis. Now where are they selling it? Some of it in Canada, but there's such a glut of cannabis now being produced in the country that they're looking to other markets. And the nearest markets are those states in the US where cannabis has not been legalized. So I think you're probably seeing some transfer of Canadian cannabis into US markets more so than has happened in the past. I mean it's always been an element there. But I think you're seeing some of that. But other questions we have is how has their revenue been affected? Have they moved into other things? Let's strike cannabis off of our things that we make money from and let's move into weapons or let's move into whatever. We have no idea. And I think that's an area that we need to explore going forward. I also heard that there was an overproduction of cannabis in the first years and the Canadian companies were seeking new markets. Is that still the case? There was underproduction in the first year. At the beginning the demand was so high that the government couldn't reach it. And people were still invested in the illicit market today. Especially with large corporate producers moving into the market. There's such an enormous amount of cannabis being produced that if you look through the official figures and you compare that with production figures from different companies you start to see an incongruence between what is reported produced versus what exists in the production. So the question I think is real, what is happening to the rest of this cannabis out there? Some companies have contracted, even closed some production facilities because of what they see as a tighter market than what they'd anticipated. Now the government reports only 7% of retail shops have closed. So I think there's still an element where there are segments of the market that are still not being met. And that if they continue to expand the retail approach that they have that maybe they'll begin to find other channels for some of this extra cannabis to feed into. In Europe several countries are planning to make cannabis legal. What are the lessons learned you would share with decision makers there from the Canadian model? One of the things I've learned I would say that the first question we need to ask is why are we moving towards a legalized regulated market? And if the only purpose is for issues of social justice, say we want to right some of these wrongs, then you might ask whether a decriminalization model which might achieve those objectives without adding any additional burdens to the overall market and the consumers might be a better approach. That said, I think you probably are going to see a number of countries continue to move forward. There's no one model for legalization. I think we've learned enough in Canada that our approach where 13 provinces are pursuing 13 different ways is maybe more complicated than it has to be. We failed at the beginning in Ontario to have enough stores, so you had a demand that wasn't being met by supply points, so we need to be better at the beginning. And one of the major things was cannabis products that are not herbal. So your edibles, your concentrates. We decided not to deal with those at the very beginning and yet they're a key part of the market. So the illicit market really took over at the beginning providing supply points for those. So you would want to make sure that if you're creating a legalized market, it's a legalized market that includes all commodities. Thank you so much. Pleasure.