Legalizing pot will have 'up-front costs,' task force head warns

Governments will have to spend money to make money when it comes to legalizing marijuana, warns the head of Canada's marijuana legalization and regulation task force.

'What happens here is going to be watched very, very carefully by the rest of the world,' says Anne McLellan

Anne McLellan, former federal health minister and head of the government's pot task force, says Canadians need to understand that Canada's legalization initiative is pioneering work. (CBC)

Taxes on legal marijuana could add up to billions of dollars a year, but before that happens Canadians may have to make peace with spending to legalize pot.

"People — and I think the provinces, the territories and the government of Canada understand this — do not expect big revenues in the early years," Anne McLellan, the head of Canada's marijuana legalization and regulation task force, told CBC News.

"In fact, there are going to be up-front costs that governments at all levels are going to have to absorb."

McLellan said both Colorado and Washington state had to spend to cover everything from public education campaigns to training for officials to manage the new regime. The nine-member task force visited the states as part of the research for its final report to the federal government in November. It has also travelled the country holding roundtable discussions with experts and held a public online consultation.

Federal Health Minister Jane Philpott told the United Nations that Canada will put its plan before Parliament in the spring of 2017.

Don't be 'naive' about organized crime, warns McLellan

When Prime Minister Justin Trudeau talks about legalizing pot, he almost never mentions profits (though he has suggested the money should be spent on addiction treatment and mental health support.)

Trudeau has tried to focus the discussion on public safety — arguing too many young Canadians are consuming pot right now and that a legal regime would be a better way to limit access while taking income away from organized crime. 

But McLellan, who was deputy prime minister in Paul Martin's government, said experience with tobacco shows that you can't entirely knock out organized crime.

'What people really need to understand is that this legalization initiative is pioneering work.' - Anne McLellan, head of pot regulation task force

"What you try to do through pricing and other mechanisms is minimize the involvement of criminal organizations, but nobody should be naive and think you can eliminate criminal activity from these areas entirely. That's not going to happen," she said.

She wouldn't suggest what an appropriate price or taxation level might be, only that it's important to find a "sweet spot" that won't encourage people to seek out a better price from illegal sources.

She also said the task force is still considering a wide range of opinions on legal age limits and the best place for governments to sell pot.

She did, however, say that while the Canadian Medical Association has recommended a legal age limit of 21, some provinces have suggested it could be as low as the legal drinking age.

Canada: a pot pioneer?

McLellan said that because so few jurisdictions have legalized marijuana, a lot of people will be watching the process in Canada.

"What people really need to understand is that this legalization initiative is pioneering work. Uruguay has done this, but [it's] a small country, not a developed nation, not part of the OECD."

"What happens here is going to be watched very, very carefully by the rest of the world."

She said Global Affairs has been talking to other countries about related issues, but said recent questions about border checks didn't fall under the task force's mandate to focus on a domestic regulatory system.

Pressure and surprises

McLellan said she hopes Canadians understand the new system won't be perfect. "There will be surprises," she said. "This regime will have to be tweaked."

"People should expect that. Government should expect that. Civil society should expect that and quite honestly the media should not describe those tweaks as failures."

She pointed to problems with edible forms of marijuana in the United States. Colorado banned THC gummies after concerns about children accidentally ingesting them.

Asked about potential harms such as children falling ill, fatal accidents from drugged driving and substance abuse problems, McLellan said those problems already exist.

"We feel pressure on behalf of Canadians," she said. "There are risks involved here, nobody should naively go into this project without understanding that there are risks. We need to identify them, understand them, help Canadians become informed about them so that again you get to make informed choices."

The former federal Liberal health minister talks about the up-front costs that will come with the move to legalize marijuana. 0:40