Cocaine Trade Open in Canada? Not So Fast

In the U.S., cocaine is a Schedule II controlled substance and its use, possession, etc. is illegal except for certain, limited medical applications. The licensed sale of cocaine for recreational use is not even remotely a concept in the U.S., and the same goes for Canada. Why then did we see a Canadian cannabis company announce that it had the ability to make and sell cocaine to the consumer public? Essentially because of a mishap with or misunderstanding about a government license amendment it received from Health Canada. While not as “out there” as the premise of the popular movie Cocaine Bear, AdAstra’s announcement about being open for business in the commercialized cocaine market sent shockwaves through the cannabis and psychedelics industries.

Cocaine press release

On February 22, publicly traded (in Canada) AdAstra issued a press release in which it stated that its subsidiary, B.C. based AdAstra Labs, received approval from Health Canada “to include cocaine as a substance that the Company can legally possess, produce, sell and distribute”. The company claimed the same about psilocybin and psilocin. This alleged approval came in the form of an amendment to AdAstra Labs’ Controlled Drug and Substances Dealer’s License. After this announcement, the company’s stock also soared.

Government reaction to commercialized cocaine

Nonetheless, reactions from both the B.C. legislature and Health Canada soon cooled the excitement around AdAstra’s cocaine announcement. The provincial government essentially took the position that AdAstra overstated what could be done with the License amendment and the federal government clarified that the License amendment limits AdAstra to just undertaking research about the drug and nothing more (and it certainly cannot also commercial sell either psilocybin or psilocin). Why did this all happen in the first place? Because of B.C.’s new three-year decriminalization pilot program for the possession of small amounts of cocaine (and other drugs), which is meant to support harm reduction and combat addiction. However, that decrim program in no way legalizes the commercial production, distribution, or sale of cocaine or other drugs in B.C.

Cocaine retraction and clarification

Last week, AdAstra issued a retraction to and clarification of the initial cocaine announcement. Importantly, the most recent release states:

The Dealer’s Licence issued to Adastra Labs does not permit Adastra Labs to sell coca leaf, psilocybin or cocaine to the general public. For cocaine, and under the Dealer’s Licence, Adastra Labs is only permitted to sell to other licensed dealers who have cocaine listed on their licence including pharmacists, practitioners, hospitals, or the holder of a section 56(1) exemption for research purposes under the Controlled Drugs and Substances Act (CDSA). The Company is not currently undertaking any activities with cocaine under the Dealer’s Licence and before doing so, it will only undertake such activities legally permitted by the Dealer’s Licence and after consultation with applicable Provincial Governments.

Random takeaways

As is always the case, decriminalization and legalization are totally different animals. B.C. is merely experimenting with decrim to see what impact it has, if any, on the issues of addiction and harm reduction. No opportunity was ever created for anyone to have a commercial cocaine trade.

The other interesting legal tidbit here is that Canadian cannabis companies may be eligible under law to have operations around certain psychedelics and other controlled substances that we just may never see here in the states. In states with cannabis legalization, it is universally prohibited for licensees to conduct certain other trades on site, like alcohol production; and don’t even think about the right to make and sell other drugs under the same roof as cannabis.

Even with this cocaine debacle for AdAstra, the U.S. and Canada remain on different pages when it comes to cannabis and other drugs, with Canada still mostly leading the way on legal reform.

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