A senior RCMP officer says it would be "naive" to think organized crime in the cannabis market will be eliminated with the legalization of recreational marijuana.
"We're very cognizant to realize that the chances of crime being eliminated in the cannabis market — [it] would be probably naive to think that could happen," Joanne Crampton, RCMP assistant commissioner for federal policing criminal operations, told MPs on the Commons health committee studying the government's legislation.
Crampton highlighted areas that give the RCMP concern, including the undercutting of legal prices by the illegal market, exportation, trafficking to youth and organized crime infiltrating the legal regime.
While most members of Parliament still have another week before they return to Ottawa, MPs on the health committee were back Monday to begin hearing testimony from medical and legal professionals, police officers and pot producers on the looming legalization of marijuana.
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"We know that it is going to take some time to fully displace a sector that has over a century made a good gain in this area," said Kathy Thompson, an assistant deputy minister in the Department of Public Safety.
In order to displace organized crime, Thompson said the government is working to ensure Canadians have a safe, accessible cannabis supply that will meet market place demands. Thompson also acknowledged that pricing is an important factor in achieving this goal.
Lessons learned in Colorado, Washington
"Price point here is going to be key in terms of what you see in the illicit market and how effective the legal market is at moving people over," Anne McLellan told the committee.
McLellan chaired the government's task force on cannabis legalization. As part of its work, the task force travelled to Washington and Colorado, which became the first two U.S. states to legalize recreational marijuana in 2012.
McLellan said Washington went tax heavy when it legalized recreational marijuana and wasn't competitive with the illicit market.
"The numbers when I was in Washington last year were pretty staggering in terms of the amount of purchase that was still in the illicit market, and they learned a very serious lesson from that and moved very quickly to change the price point through taxation," said McLellan.
McLellan said the cost per gram between the illegal and legal markets in Colorado and Washington are now similar.
Branding and the black market
The committee also heard from industry leaders who stressed the importance of branding in defeating the black market.
"Right now, if you go online you can order cannabis from 20-plus different sources online across Canada. None of those are legitimate sources of cannabis, and it will be incredibly important for Canadian consumers to differentiate between the illicit market and the new and emerging licit market," said Philippe Lucas, executive director of the Canadian Medical Cannabis Council.
Lucas said allowing for limited branding to adults would eliminate confusion between the illegal and legal markets, allow professional companies to separate themselves from "less scrupulous" competitors, differentiate high-quality products from low-quality products and provide an opportunity to educate consumers about responsible consumption.
"We think that where adults only can congregate, such as the equivalent of liquor outlets, the equivalent of bars or consumption sites, we feel that there should be some ability to be able speak to those adults — be able to share messaging on different products and product effects," said Lucas.
In its current form, the government's proposed legislation may place significant restrictions on the packaging and marketing of cannabis products and accessories.
Week of hearings
The committee is holding five full days of uninterrupted hearings that started at 8:30 a.m. Monday.
Committee chair and Nova Scotia Liberal MP Bill Casey said he's concerned about key public policy issues such as preventing the contamination of cannabis growing facilities, the four-plant allowance rule and a minimum 18-year age of access.
"We have a lot to learn and a lot to listen to," he told CBC News.
NDP MP Don Davies, vice-chair of the health committee, has accused the Liberals of rushing the hearings process, "cramming" in witnesses to dilute parliamentary and public engagement and debate around flawed legislation.
"I'm concerned they're trying to rip the bandage off and move to the next stage without getting really varied and diverse input from Canadians," he said.
Along with the witness hearings, the Commons health committee has also received 99 written submissions.
The Canadian Medical Association repeated its concerns about health risks associated with cannabis, particularly in its smoked form. It urged the government to set the legal age at 21.
The government plans to have legislation passed by July 2018.
Casey said the committee will likely make recommendations on how to improve and strengthen the legislation, and he did not rule out a potential suggestion to alter the age limit.
Late last week Ontario became the first province to announce a framework around the sale and consumption of marijuana, which includes 150 stand-alone stores by 2020 and an online ordering service. The legal age for cannabis use in Ontario will be 19.