I was fortunate enough to be a guest in the Executive MBA Class of 2024 yesterday at the Ivey Business School to discuss an accounting case on a major cannabis Licensed Producer (LPs). That sentence alone is enough to tell me cannabis normalization is beginning to happen: Ivey, a respected and fairly conservative establishment, having guests in from the cannabis sector to speak about a case involving financial accounting of biological inventories and their impacts on annual published statements would have been COMPLETELY out of the question in 2018. And yet it felt so normal: we dug into the drivers of decision making for LPs in order to understand why certain elements were built up on the balance sheet and income statement. We could have been discussing development of Ziploc containers and the impact of launching a new format in the market. I’m honoured Mary trusted me to be a steward of the space in her class and I’m thankful for the thoughtfulness of the questions posed by the group. Can’t wait to see more cases of this nature in the coming years!

To that end, as today is the four year anniversary of recreational cannabis legalization. How do we feel normalization is coming along?

The cover photo for this post needs context: it’s a semi-truck turning onto a very tight street in the Exchange District of Winnipeg, MB at 10:39am on October 15, 2017. This was the first shipment of recreational cannabis we received at Tokyo Smoke. It was from United Greeneries and we were ecstatic to have something to sell when the doors opened ~47 hours later - the timelines from package regulations being released to when product needed to be at stores was impossible for most producers to fulfil. We scrambled to unload the truck and bring the packages into our inventory for the first time. Looking back, it was a heady experience in that we knew we were one of the first stores in the country to have received legal recreational cannabis and yet all of us had devoted considerable time and effort into the belief that this industry was the future. For the recreational cannabis sales projections from Deloitte’s 2018 Cannabis Report to come true, there would need to be over $4,000,000,000 in annual retail sales across thousands of stores. Was that even possible based on how difficult one order felt? There wasn’t time to worry about other stores on that particular day, as we needed to focus on our task at hand: getting two stores open on 10.17.

In a similar way that the cover photo needed context, I believe the cannabis sector needs some context, since the news cycle isn’t the most positive on the space these days. Try to put yourself back in September 2018 (yes, it might help if you turn on Drake’s Scorpion album for really putting you in the proper mindset):

• If recreational cannabis sales in Canada surpass $4,000,000,000 in the fourth year of legalization, would you consider the industry a failure? 

• If there are over 3,200 legal recreational cannabis stores open in Canada by the fourth anniversary of legalization, has the build up failed to meet expectations?

• If the most populous province in Canada has over 2,000 unique product offerings in the legal recreational cannabis market in four years, has the innovation been too slow?

We live in a world where we want everything instantaneously - I’m only noting this mentality because I certainly see it in myself - but if we step back and look at the facts presented by StatCan, the OCS, and Benchmark, there have been some tremendous wins achieved. Of course, there have been a ton of learnings and missteps along the way, but should we have expected anything less? My belief is that as long as we keep respecting the plant and its potential, learning from guests and their preferences, and being responsible with focus on education to keep product out of the hands of kids, we will continue forward on this path of normalization. And we’ll be able to pick ourselves back up when we stumble along the way. I’ve said it before: the last major prohibition that was lifted was alcohol, which took ~12-18 to hit what most considered to be a “mature” state. Cannabis is well on its way.

Thanks to all the amazing folks that worked for decades to bring about legalization, thanks to those that worked to build its current framework, and thanks to those continuing to support the industry.