and Canadians' support of cannabis consumption lounges. June will be a pivotal ..... A public consultation, which was po
1
May 2018
CA N N A B I S I N CA N A DA
2
Current Status Update
Current Status Update Welcome to another edition of Cannabis in Canada. This issue focuses on findings from our ongoing tracking poll that examines how Canadians view various aspects of legalization and the cannabis industry. This month our consultants look at three key findings in our most recent wave of polling: How Canadians perceive the benefits and consequences of legalization, Canadians’ lack of support for an excise tax applied to medical cannabis sales, and Canadians’ support of cannabis consumption lounges. June will be a pivotal month for the cannabis industry, with the final Senate vote on bills C-45 and C-46, and the Ontario provincial election. Now more than ever, it is important for industry to engage government and the public on the significant issues related to legalization. Beyond issues of public policy, we have also begun to poll the kinds of choices cannabis consumers will make after legalization. It’s clear smokeless cannabis products will be extremely popular, particular among unexperienced users. We will continue to track consumption habits of consumers as we transition to a legal cannabis marketplace. Please enjoy and feel free to pass along.
“...it is important for industry to engage government and the public on the significant issues related to legalization.”
Alex Shiff Senior Consultant
3
Key Findings
Key Findings Given that support for legalization is limited to a minority of Canadians, the federal government and its task force on the issue faces challenges in developing legislation that addresses a myriad of public concerns.
33%
40% of Canadians support the legalization of cannabis while 39% are opposed.
of Canadians believe that Bill C-45 ensures that youth will not have access to cannabis.
85% SEVEN-IN-10 (70%) Canadians are nervous that legalization could lead to more cannabis use by minors.
of Canadians are concerned about issues associated with driving under the influence of cannabis.
Canadians Ready for Cannabis Lounges 43% of Canadians expressed support for licensed cannabis consumption lounges versus 33 per cent who oppose.
4
Key Findings
FOUR-IN-10 (43%)
FIVE-IN-10 (53%)
In Ontario 43 per cent support cannabis lounges and only 31 per cent oppose.
Young people are the most significant supporters with 53 per cent of 19-34-yearolds in favour of consumption lounges.
59% of Canadians see tax revenue from recreational sales as a credible benefit of legalization.
69% of Canadians agree with an excise tax on recreational cannabis.
52% of Canadians oppose applying
Only 29% of Canadians support an
an excise tax to medical cannabis.
excise tax on medical cannabis.
It is quite clear that Canadians do not want a sin tax applied to a legitimate medical product.
5
Does government have legalization under control?
Does government have legalization under control? Canadian’s aren’t convinced
Despite governments at the federal, provincial and municipal levels now ramping up efforts to preparare for legalization, Navigator’s polling shows that Canadian’s concerns have remained static. Overall, respondents’ support for legalization is at an all time low at 40 per cent, and opposition is at an all time high at 39 per cent. With the regulatory environment for cannabis starting to materialize at all levels of government, it is curious that Canadians are seemingly not taking solace in this fact and instead are maintaining their long-held concerns. Level of support or Opposition to legalization of recreational marijuana Net Support Strongly Support
40 18
Somewhat Support
22
Neither support nor oppose
21
Somewhat oppose Strongly Oppose Net Oppose
15 25 39
Centrepieces of the federal government’s rationale for legalization have always been that it will keep cannabis out of the hands of kids, eliminate the black market and provide a safe, regulated product for consumers. Over the last 13 months, Navigator has tracked these policy goals and the confidence Canadians have in the government achieving them. For May, our polling indicates that only 33 per cent of respondents are reassured that the government will ensure minors do not have access to cannabis, only 46 per cent are confident that legalization will eliminate the black market, and only 44 per cent believe government will ensure packaging is not appealing to youth. To be fair, 58 per cent of respondent’s do believe the government will be effective in overseeing safety and quality control requirements, however, this does not register as a top concern among Canadians.
Jenessa Crognali Consultant
6
Does government have legalization under control?
CONFIDENCE IN EFFECTIVENESS OF LEGALIZATION ON DEALING WITH VARIOUS ISSUES RELATED TO MARIJUANA Net Effective Reduce the burden on the criminal justice system by unclogging the courts with cases related to possession of small amounts of cannabis.
30
Protecting public health through strict product safety and quality requirements
40
16
42
Undertaking a public awareness campaign to inform Canadians, especially youth of the health and safety risks of cannabis consumption.
13
40
Ensuring that the new laws deal with issues related to driving under the influence of cannabis
14
37
Eliminating the black market for cannabis
11
35
Requiring packaging or labeling of cannabis products in a way that does not make it appealing to youth.
12
32
Ensuring that youth do not have access to cannabis.
Very effective
Somewhat effective
9
24
Not too effective
Our polling also shows respondents’ concerns have not abated as we move closer to legalization, with levels of concern only fluctuating a few percentage points over the past 13 months – when, as we approach legalization, one might have hoped to see a downward trend in concern, correlated with an upward trend in confidence in the government. This lack thereof could indicate a gap in government’s roll out of legalization regarding public education and awareness of regulatory implementations. The chief concern among respondents, 85 per cent, are issues associated with driving under the influence of cannabis. Moreover, 70 per cent of Canadians remain concerned that legalization will lead to greater availability of cannabis for those who are under age. This concern relates back to the lingering lack of confidence Canadians evidently feel towards the government and the spirit of legalization in keeping cannabis out of the hands of minors – despite it being one of the government’s key policy goals.
“The chief concern among respondents, 85 per cent, are issues associated with driving under the influence of cannabis.”
19
11
25
31
31
30 33
35
Not effective at all
32
70
17
58
16
52
18
51
24
46
23
44 33
7
Does government have legalization under control?
PERCEIVED CONCERNS ABOUT LEGALIZING MARIJUANA Nov. 2016
Dec. 2016
Jan. 2017
Feb. 2017
Mar. 2017
Apr. 2017
May 2017
June 2017
July 2017
Aug. 2017
Sept. 2017
Feb. 2018
May 2018
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
%
%
%
%
%
%
%
%
%
%
%
%
%
Potential issues associated with driving under the influence of cannabis
83
82
84
84
84
84
81
81
81
81
83
82
85
Greater availability of cannabis to young people who are not of legal age
71
70
72
70
72
71
69
68
68
68
70
67
70
Greater use of cannabis among young people, including teenagers and those under the legal age
70
70
71
70
72
71
68
67
66
66
69
68
70
Issues around the strength or potency of different types of cannabis
64
64
65
66
66
66
64
60
61
61
63
62
62
An increase in the use of cannabis in the population
57
58
59
57
60
59
59
57
57
57
60
59
61
an increase in crime around outlets where recreational cannabis will be available for sale
56
54
57
57
60
60
58
56
55
55
56
55
58
The use of cannabis will lead to the use of harder drugs (e.g. a “gateway” drug)
55
55
56
55
54
56
55
53
52
52
54
54
54
These signals tell us that the government – all levels of government – have been unsuccessful in instilling confidence in the population. With legalization on our doorstep, the opportunity for government to impact Canadian opinion in advance of the new regime is waning. At this point, it appears that governments will be defaulting to a “just wait, and you’ll see” approach to earning the confidence of Canadians and relieving their concerns with legalization.
8
Canadians don’t want a sin tax on medical cannabis
Canadians don’t want a sin tax on medical cannabis Cannabis legalization advocates have always made potential tax revenue a major selling point for legalization. After all, the common adage “regulate and tax” supports safety and revenue arguments for legalization. The Liberal government frames legalization as a mean for improving public safety. That’s why their election platform only passively mentioned an excise tax on cannabis but emphasized legalization would help keep the substance away from children. Kanivanan Chinniah Consultant
However, increased tax revenues from legalization are also important to Canadians. According to Navigator’s monthly online public opinion tracking survey, 59 per cent of Canadians see tax revenue from recreational sales as a credible benefit of legalization.
CREDIBILITY OF PERCEIVED BENEFITS OF LEGALIZING CANNABIS Net Benefit An end to criminal charges linked to the possession of small amounts of cannabis for personal use
27
34
20
8
8
60
An end to clogging up the court system with unnecessary cases and prosecutions for the possession of cannabis for recreational use
28
32
20
9
9
60
An increase in tax revenues resulting from the sale of recreational marijuana
27
7
7
59
8
57
10
55
9
52
Provides those who use cannabis with access to quality-controlled products that meet strict government requirements
21
A positive economic impact from revenues generated from taxes, licensing fees, and paraphernalia sale
22
Provides clear regulations and laws about who may grow cannabis A recognition that government understands the current social values of Canadians
Very Credible
Somewhat Credible
Neutral
32
21
23
36 33
18
22
34
11
23
Somewhat not credible
Further, 69 per cent of Canadians agree with a general sin tax on recreational cannabis similar to what’s charged on cigarettes, alcohol and fuel. These numbers remain constant across age groups, income level, region, gender and education level.
8
10
26
29
9
15
Not Credible at all
15
34
9
Canadians don’t want a sin tax on medical cannabis
Agreement with excise Tax on Recreational Cannabis 69
Net Support 51
Strongly agree Somewhat agree
19
Neither agree nor disagree
15
Somewhat disagree Strongly disagree Net Oppose
6 9 15
The federal government has decided that they will impose a tax on cannabis regardless of its use. Cannabis consumed for medicinal use will also be subject to an excise tax, unless it has been assigned a Drug Identification Number (DIN) by Health Canada. Public opinion shifts on applying an excise tax on medicinal cannabis. According to our polling, 52 per cent of respondents opposed taxing medical cannabis when told other medicines were not subject to any excise tax. There are no significant differences between demographic groups on this question. Agreement with excise Tax on Medical Cannabis Net Support
29
Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree
18 11 19 20
Strongly disagree Net Oppose
32 52
A group of parents whose children use medicinal cannabis products have launched an online movement under the hashtag #DontTaxMedicine to stop the excise tax on medicinal cannabis. The campaign has support from Conservatives and New Democrats in Ottawa. Liberal MPs are fighting moves to exempt medicinal cannabis from excise taxes, despite strong opposition from voters. While it appears reasonable to move away from taxing medicinal cannabis, there are other implications to consider. Health Canada approved the use of cannabis as a treatment well before the Liberal Party took power. Since 2014, individuals can legally purchase medicinal cannabis from authorized producers with a prescription. Today, almost 269,000 Canadians consume medicinal cannabis for various ailments. Currently, anyone who can find a sympathetic physician can obtain permission to purchase medicinal cannabis. Should there be an exemption for the tax on medicinal cannabis, the Liberal government claims that more Canadians may try to avoid paying tax by acquiring a prescription. The public would appear to disagree with this assumption, as it is quite clear that Canadians do not want a sin tax applied to a legitimate medical product.
10
Canadians Ready for Cannabis Lounges
Canadians Ready for Cannabis Lounges As cannabis legalization approaches, proponents and detractors have different visions of their neighbourhoods and public spaces.
As cannabis legalization approaches, proponents and detractors have different visions of their neighbourhoods and public spaces. Long-time activists look forward to consuming without intervention from law enforcement, while opponents conjure up images of reefer madness as a last-ditch warning about its harmful effects. Realistically, neither vision will materialize in the early days of Canadian cannabis legalization. While all of the provinces have advanced different regulatory frameworks, they all have restrictions on where cannabis can be consumed. Ontario and Quebec have banned consumption in public spaces. Other jurisdictions like British Columbia and Alberta have developed restrictions loosely based on cigarette rules. The cautious approach of provincial governments is not surprising. If the purpose of legalization is to improve health and safety outcomes while restricting access to children, limiting its prevalence in public spaces is important. And with all ten provincial governments being tasked with establishing and implementing distribution frameworks, the prevailing approach has been to take on one challenge at a time. But it’s a delicate balancing act, as each government tries to adapt to a newlylegalized industry. A legal market that heavily restricts legal consumption continues to stigmatize cannabis use and makes it hard for police and public health officials to monitor consumption. The above point is exacerbated in provinces like Ontario and Quebec. While provincial law will not ban home consumption, a lack of clarity remains over how landlords and condo boards may address cannabis use in multi-unit dwellings. One solution would be to allow cannabis consumption lounges, licensed establishments where residents of age can enjoy cannabis in a safe, legal environment.
Jeff Costen Consultant
11
Canadians Ready for Cannabis Lounges
The Liberal government in Ontario appears to recognize this opportunity, but their plan remains as unclear as the party’s electoral future. A public consultation, which was posted on a news bulletin from January until March 2018 asked Ontarians for input on potential cannabis regulations, including rules around cannabis lounges. Industry advocates enthusiastically contributed to this conversation. However, a spokesperson for Ontario’s Attorney General put a pause on this excitement by clarifying that the province had no immediate plans to allow cannabis legislation and was simply examining feedback on next steps. By playing coy, the Ontario Liberals laid the groundwork for action, without having to take any controversial steps in critical election months. Treading cautiously is typical, especially in an election year where self-inflicted missteps can be fatal. But Ontarians want cannabis lounges. The province will need to move forward on these establishments to satisfy voters. Inaction is not only impractical but results in a two-tiered regulatory system where owners of detached homes have access others lack. Cannabis lounges make sense for everyone. They provide order and sensible rules for an activity that will already be taking place. More importantly for our political leadership, they are popular. Navigator’s exclusive polling tells us that in May 2018, 43 per cent of Canadians expressed support for licensed cannabis consumption lounges versus 33 per cent who opposed. Ontario falls in line with this national average, as 43 per cent support cannabis lounges and only 31 per cent oppose. Young people are the most significant supporters with 53 per cent of 19-34-year-olds in favour and only 22 opposing. As Canadians grow accustomed to legal cannabis and as Gen-Z ages, these numbers will grow. This isn’t to stay that legalization and regulation of cannabis lounges will be without political hurdles. Important questions remain about private versus public sector delivery and reluctant Canadians remain a powerful force in decision-making processes. But the need for cannabis lounges cannot be overstated, politically and practically speaking. Governments can kick this problem down the road, but they cannot avoid the fundamental conundrum: a legal cannabis market requires a home for legal consumption. Cannabis lounges can be that home.
12
Navigator
Navigator is a team of experienced professionals with backgrounds in public affairs, public opinion research, journalism, marketing, law, government relations and politics. Our passion and expertise lead to creative insights and fresh perspectives. Together we are able to offer clients integrated solutions based on sound research and in-depth analysis that explores issues in new ways.
TORONTO CALGARY EDMONTON MONTREAL OTTAWA REGINA VANCOUVER LONDON, UK
Research
Capital Markets Advisory
Issue Management, Crisis Response and Reputation Recovery
Leave bias and gut-thinking at the door, and drive to the heart of your issue through focused research. Whether you need to understand consumer attitudes and preferences or grasp nationwide opinion on issues and policy, Navigator has a highly experienced team of research professionals to design and execute research programmes that respond to your unique needs.
Corporations and individuals sometimes find themselves on the wrong side of public opinion. We quickly pull together the right team to manage issues before they escalate into major crises. But when disaster strikes, our clients depend on our custom-built communications plans to minimize reputational damage.
Navigator’s full-service, in-house research delivers clear, meaningful and useful insights to position your communications, and guide government relations and marketing strategies. Our proprietary research methodologies ask the toughest questions, uncover the most valuable answers, and ensure that you truly understand the big picture.
Mergers & Acquisitions – We provide strategic communications and government relations advisory on both sides of M&A transactions, both large and small, hostile and friendly, and involving companies and regulatory regimes worldwide. Investor Relations – We work with leading public companies to craft unconventional investor relations strategies based on thorough research, compelling narratives and campaign-style execution. Shareholder Activism – We provide strategic communications advisory services on both sides of shareholder activism battles involving leading global companies and sophisticated activist investors. Board Advisory – In an increasingly complex world, we provide boards of directors with independent advice related to governance, human resources and related matters.
Activation and Persuasion Campaigns
Government Relations
We help clients deliver on stakeholders’ expectations through participatory, transparent campaigns that track shifting opinion, drive engagement and change behaviour. A variety of qualitative and quantitative research approaches support the development of appropriate hypotheses and nuanced strategies to create a critical mass of public support. We build campaigns from the ground up: custom websites, activist portals, targeted advertising, sophisticated analytics, and social media integration.
We offer a full suite of government relations advisory services across Canada. With professionals of all partisan stripes, we build programmes to influence public opinion and shape public policy. We help our clients navigate the complex process of decision-making at all levels of government. We provide our clients with advice, insight, strategy and direct lobbying activities.
We formulate crisp messaging, handle media inquiries and provide media training. Once the crisis has passed, we develop strategies to quickly rebuild and recover.
13
CANNABIS IN CANADA
May 2018
