Canada’s Cannabis Industry be Fixed
Can Canada’s Cannabis Industry Be Fixed?
Shane Morris’ opinion piece in the Financial Post prompts an interesting question: can Canada’s cannabis industry be fixed? He writes of “half-baked cannabis regulations” and over-taxing that is burdening the industry.
“If these shortcomings are not fixed, Canada’s young cannabis industry may never grow to its full potential,” Morris writes. (Regular readers may remember Morris and his views on cannabis protectionism about a year ago.)
He warns that the upcoming Cannabis Act review will probably be ineffective – and a missed opportunity.
“Although the Cannabis Act is up for review later this year, Health Canada has already told industry stakeholders that only ‘limited resources are available for the review,” he writes.
Yet, he reports, the cannabis industry contributes $18.3 billion to Canada’s GDP. That’s over one-third of agriculture, forestry, and fisheries combined. A good chunk of revenues goes to Health Canada and provincial governments. The Ontario Cannabis Store, for example, takes a 50 percent markup, he estimates.
“Health Canada also takes 2.3 percent of sales for a new ‘annual regulatory fee’ (yet still somehow lacks resources for a decent review of the act),” Morris writes.
“The result of governments taking such a large slice is a high price that makes it hard for the industry to compete with the cannabis (illegal) market, which was the main goal of legalization.”
Barriers to Fixing Canada’s Cannabis Industry – LPC
There is more to fixing Canada’s cannabis industry than money or political will. Morris points out that Canada’s cannabis industry is fractured. Among other things, that means it does not have a strong lobbying presence like food or pharmaceutical.
“There is a real chance the opportunity to fix key cannabis issues will be missed.”
He’s not alone in his assessment. Nathan Mison is one of the few lobbyists trying to raise issues ahead of the Cannabis Act review. His message: loosen cannabis rules. An ex-Fire & Flower executive, Mison is now the co-founder and CEO of Diplomat Consulting.
“Our (Canada’s cannabis industry) primary focus has been on health and displacing the black market, but that should expand,” Mison said. Now that we know the sky isn’t falling, it’s time to make a sophisticated new set of rules to support the industry. Australia for example is taking a progressive approach to legalizing cannabis, even if they are behind Canada along the timeline.
But that’s what experts like Morris and Mison argue: that soon enough, Canada won’t be a leader in the global cannabis industry.
“Implementation has been haphazard at best. If these shortcomings are not fixed, Canada’s young cannabis industry may never grow to its full potential.”
Canada’s cannabis industry is at a crossroads, both domestically and globally. Regulations are important to ensure that our youth are safe, that Canadians have a safe supply of cannabis, and to combat the illegal cannabis market. But there are dangers to over-regulation as well. And, some issues still need to be addressed, as Morris points out: Indigenous involvement in the cannabis industry, excise duties, changes to the CBD industry, restrictions on marketing, and red tape.
There is an opportunity to change things around within Canada’s cannabis industry. But it will take political will and a serious attempt to address its shortcomings. The upcoming Cannabis Act review is that opportunity. Will Canada take it?
Read Morris’ Full Opinion Piece at the Financial Post
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