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Canadian provincial governments are scrambling to draft regulations for recreational cannabis sales before the proposed deadline of July 1st, 2018 arrives, but opposition from conservative politicians as well as provinces themselves may delay the start of legalization until 2019. In the country's Senate, conservatives are threatening to delay the passage of two cannabis legalization bills unless they can be amended to address concerns over taxes, youth access to pot, law enforcement training, and workplace drug tests.
The two bills in question are C-45, which would legalize the use and sale of cannabis, and C-46, which creates laws and punishments for marijuana-impaired driving. The Senate will begin debating the bills next month, but Conservative Senator Claude Carignan told The Globe and Mail that legislators “have to do our job properly, and that means months” of debate on the issue. "The House took eight months to study" the bills, he explained. "It will probably take the same timeline to do our job properly."
Independent Senators have criticized the Conservatives for attempting to block legalization. "This is the old system going on," Independent Senator Frances Lankin said to The Globe and Mail. "This is the opposition trying to throw a spanner into the works of the government." Regardless of the threatened delay, Independent Senator Tony Dean, a sponsor of C-45, still believes that the approval of the two bills “can easily be done by July 1.”
But even if the Conservative pushback fails to delay legalization, a separate debate over taxes may cause the process to grind to a halt. The federal government has proposed that they should receive half of all cannabis tax revenue, but some provinces and territories are arguing that they deserve a larger cut of this income because they will be fronting the majority of legalization-related costs. Federal and provincial finance ministers will hold a meeting this week to hash out the details.
Finance Minister Bill Morneau said that he has already earmarked over $1 billion of federal funding towards cannabis legalization over the next five years, CTV News reports. "We've identified significant funds that we are going to put forward in that regard," Morneau said. “We need to cover our costs - they're legitimate." Manitoba Finance Minister Cameron Friesen countered that "If the responsibility [of enforcing and regulating legalization] resides with the provinces, then the resources must flow to the provinces. Any departure from that theme, then, must come with concessions from the federal government."
Other provincial finance ministers have agreed that the federal government must justify its reasoning for asking for such a large portion of the tax revenue. "Before we even get to talking about sharing, we want to hear about what responsibilities the federal government's taking on to justify taking any of the percentage," said British Columbia Finance Minister Carole James according to CTV News. "Certainly, from our perspective the formula put out by the federal government is a no-go. That's very clear." Morneau said that he “can be flexible” with the negotiations, but refused to say how much of a compromise the federal government would be willing to accept.
If either of these issues delayed the July deadline for legalization, it would be a financial blow to federal and local governments as well as cannabis startups across the country. Contracts between suppliers, provincial governments, and businesses are already being signed, and public and private retail establishments are already signing leases for storefronts. Any delay of legalization could leave cultivators with unsellable product, or have businesses paying rent for stores that they can’t yet legally open.