Cannabis Aid Coming After All?
Some of the World’s Biggest Cannabis Companies Asking for Help to Save the Industry – LPC
The Canadian government has set up a stimulus fund of $10 billion through Export Development Canada and the Business Development Bank of Canada. This is to help companies survive the economic disaster the COVID-19 outbreak brought on. However, cannabis companies have been left out. Now, 71 cannabis companies across Canada are asking the government for some cannabis aid for its workers.
Aurora’s Rick Savone, senior vice-president of global government relations, said the licensed producer system is in jeopardy.
“If we don’t take measures now to protect the industry… we put at risk all of the progress that we made from a policy perspective,” Savone said. “We serve a victory to the black market.”
Aurora along with other companies including Canopy Rivers Inc. (a subsidiary of Canopy Growth that holds several companies in its portfolio including PharmHouse), WeedMD, Organigram and Fire and Flower Inc., wrote Ministers Bill Morneau (Finance) and Navdeep Bains (Industry) asking for access to cannabis aid in the form of wage subsidies.
Cannabis aid couldn’t come at a better time. The cannabis industry is already facing hardships. Cannabis sales declines last year coupled with Ontario’s slow retail growth impacted many companies including the big ones. In February Aurora, shed 500 jobs and wrote down up to $775 million. Things were looking up when Ontario finally opened for business. Then, COVID-19 hit.
Cannabis Aid Could Preserve the System – LPC
Companies throughout the supply chain could use cannabis aid, including retailers. Calgary-based YSS Corp., also a subsidiary of Canopy Rivers, operates 17 cannabis stores in Alberta and Saskatchewan. YSS chief executive Theo Zunich said they had to close one store and dramatically cut hours in its others. Many workers are opting to stay at home – a choice the company offered to employees.
“We’re just constantly balancing this decision of whether we should put everybody on employment insurance,” Zunich said.
Although he supports cannabis aid in theory, YSS wouldn’t qualify, he said. And, it probably wouldn’t help.
“We have about 162 employees and you have to have under 100,” he said. “Even then the wage subsidy is 10 per cent of a maximum of $25,000 over three months.”
It’s clear that COVID-19 is going to wreak havoc for the next several weeks or months. It’s already decimating many different industries. However, most of those same industries will have government assistance of some kind. Should cannabis aid be treated any differently?
As Aurora’s Savone said: it took a lot to build the Canadian cannabis industry. We should do everything we can including cannabis aid to ensure it survives this too.
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