Ready or not it’s official: legalized recreational cannabis has come to Canada. It’s a huge change in the status quo in terms of legal and policy implications and brings a brand-new market to bear that has the distinction of already being a proven winner. Canada’s black market for cannabis was worth as much as $6.2B in 2015. It’s going to take time to iron out the basics of how everything will work going forward, but I believe it is prudent for those in the tourism sector to begin thinking critically about the potential opportunities and challenges this new status quo brings to the table.
I recognize that this is a complex topic that is often regarded through an ethical and moral lens. However, I think history is our guide here and I firmly believe public sector hunger for additional tax revenue and private sector needs to diversify and enter new markets will lead to rapid adoption of legalized cannabis opportunities. The tourism and hospitality sector will need to keep pace and take a leadership position if we’re going to build a competitive, safe, and attractive cannabis tourism industry in Canada and Saskatchewan.
Here a few things to consider:
We just became the most popular host in a very small and intimate party
With the formal adoption of legislation legalizing recreational cannabis, Canada becomes just the second country in the world to do so, joining Uruguay which passed legislation in 2013. Given our accessibility and relative perception as a safe and travel-friendly destination, Canadian legalization has caught the attention of travellers and industry who are motivated by cannabis on a global scale. Right now, in the eyes of many, we’re the only game in town on a national level.
There are currently 11 states in the U.S that have legalized cannabis consumption, however their ability to market export-focused cannabis tourism products is somewhat curtailed by the strict laws that prohibit recreational cannabis consumption at a federal level, which means that cannabis-related travel activities carry risk of expulsion and travel bans for those who reveal it at border crossings. The big opportunity then is to get a head start on developing policies and partnerships that will accelerate the growth of the industry and put Canada and its provinces in a leadership position in this market.
Rapid action is needed however because…
The party is going to get crowded soon and the stakes will change
It appears that support for legalization of recreational cannabis is hitting critical mass. There are at least ten countries either developing recreational legalization policy, actively considering it, or feeling significant lobbying pressure to consider it. Among those countries are our neighbours in North America, both the U.S. (yes that seems like a long shot, but public support is significant and a change in government will open the door) and Mexico. If we delay in developing a sustainable industry, then we will lose the advantage we currently possess by being one of the first countries to allow the opportunity.
Lessons we can learn
There are challenges to building cannabis tourism experiences from both a regulatory and marketing perspective. Many nations including China and the U.S. strictly prohibit the use of cannabis and have indicated that they will be monitoring their citizens for signs of use during their travels. This does place an ethical concern on operators to be careful which markets they promote to and how they record customer data. It’s also paramount that potential operators consider the safety components of their offerings. Tour operators will be facing high liability pressure when booking experiences that involve cannabis and a well thought out safety strategy will make your product much more attractive. It is critical for everyone involved that operators consider their transportation and accommodation partners carefully. Finally, cannabis-related experiences should be developed through a transformational experience framework and focused on a high-quality standard. Pairing activities such as culinary and culture are a natural fit. These types of experiences are what the export tourism marketplace is craving.
How do we start?
Everything in this space is so brand new that most provinces are still unable to roll out enough product to satisfy local demand, nevermind tourism. On top of that the rules governing sales, marketing, and consumption vary widely from one jurisdiction to the next. It’s easy to get caught up in the day-to-day stumbles of an industry in its infancy. The key to moving forward will be for those industries that will be directly impacted by cannabis tourism to take leadership positions. We need to begin planning for a near future where cannabis related tourism presents an opportunity for economic growth that supports business development, expansion, and labour force development. Operators in the hotel, restaurant, and hospitality industry, along with liquor and gaming, municipalities and Indigenous Nations need to collaborate and form a common ground. Some lobbying will need to take place to ease regulations and a strategy will need to be developed to justify that easing. So once again, as always it will take effort and sitting on our thumbs will cost us.
If you would like to connect, email me at email@example.com. If you are enjoying the newsletter, please share it with a colleague. Thanks for reading.