Nearly four years after the legalization of cannabis in Canada, the federal government will finally announce on Thursday its plans for a long-awaited overhaul of the country’s cannabis law.
The legislative review was due almost 12 months ago, and calls for reform are ringing from coast to coast.
According to Health Canada, “When reviewing legislation, the impact of the law on public health needs to be examined. In particular, he should study the impact of cannabis on the health and habits of young people.
With so many unlicensed weed vendors operating in stores across the country as well as online, some industry leaders are telling the government that consumers’ health and well-being are at risk.
When weed was legalized in Canada in October 2018, it sparked a green rush, but fears are now growing that part of Canada’s cannabis industry could go to waste.
CTV National News spoke to the former CEO of cannabis giant Canopy Growth, president of the Cannabis Council of Canada and a brand partnerships expert who now works for a company that introduces consumers to black market products.
While almost everyone who works with marijuana agrees that radical changes are needed, there is still no consensus on how to move forward.
Industry complaints range from exorbitant taxes, government abuses and advertising restrictions to the spread of the black market.
Leafythings, an online cannabis catalogue, recently won the “Best Innovative Technology” award at a nationwide industry gala, although their big win got everyone’s attention primarily because the products they offer online come from both licensed companies, and from unregulated retailers, as legislators always point out. . as illegal.
Nima Derak, director of brand partnerships at the company, characterizes those who work on the black market as “independent operators looking to enter the market – most of these people want to enter the (legal) market, but due to government financial barriers, they really having a hard time.
In major metropolitan areas across the country, regulated marijuana shop owners are sounding the alarm, saying provincial governments are issuing too many retail licenses, leaving city streets overcrowded with shops. Look no further than Toronto, which now has more marijuana stores than Tim Horton stores.
“Many of these family businesses will go bankrupt, they will lose their savings,” adds Derak, although many legal and regulated cannabis shop owners point to the black market as much of the problem. .
George Smitherman, president of the Canadian Cannabis Council, believes that “the playing field is far from level. There are illegal retail storefronts, there are many illegal delivery services that are also largely ignored (by the authorities).
A report prepared by the Cannabis Board of Canada notes that in Ontario each gram of marijuana is subject to a combined tax of more than 27% by the provincial and federal governments. The Government of Ontario then applies an additional markup of almost 19% – all before the product is on the market for sale. “No other industry could handle such a tax takeover,” says Smitherman.
Meanwhile, the black market operates without paying a single cent in taxes on its products. Smitherman believes that the authorities and prosecutors must find a way to stop illegal operations. “There is a big regulatory body, but not enough laws to stop obvious illegal operators, and nobody is doing anything about it,” he said.
Large regulated cultivators and cannabis growers are also getting a smaller piece of the pie due to mass layoffs and steep falls in the shares of major Canadian industry players such as Aurora Cannabis and Canopy Growth.
In 2019, Canopy Growth shares reached almost $70, today they have fallen to about $4 per share. The company turned down our request for an interview, but former CEO Bruce Linton told CTV National News that “The actual dollar sales of Canopy for cannabis have declined as the market has grown. So they actually sell less total revenue.
Linton wants to see easing of government restrictions on marketing and advertising so that manufacturers and regulated producers can compete with a black market that has no limits on their packaging or the effectiveness of their food products.
“If you want a legal, regulated, and secure system to succeed, it needs to be able to sell products that you can identify, link, and create,” notes Linton.
Derak and his colleagues at Leafythings believe that anyone can succeed. It calls for “a system similar to Canadian food standards where manufacturers and brands can retain samples of their products and send samples to independent laboratories for testing and distribution directly to regulated businesses.” He also argues that many black market businesses would be willing to pay taxes if “exaggerated” government regulations were lifted.
Smitherman, who previously served as Ontario health minister, believes Derak and others are “trying to make the illegal market work better for themselves” rather than for the industry and consumers in general.
“We are focusing on adult consumers, giving them the right to choose where they buy and what they buy,” Derak retorted, pointing out that the Canadian cannabis industry “is a $6 billion market overall, and we are missing out on half the market. It’s time to put that money in and start contributing to Canadian society.
When cannabis was first legalized in Canada, the federal government transferred regulatory responsibilities to each provincial government, creating a patchwork system with different laws and regulations depending on where you are in the country.
For an industry that is spitting in front of the world, all eyes will now be on the Government of Canada’s revision of the Cannabis Act. In an email to CTV National News, Health Canada states that “Government is committed to implementing a robust, evidence-based legislative review process that will measure progress towards the goals of the Cannabis Act.”
As the government prepares to announce its plans to overhaul the Cannabis Law, Aurora Cannabis this week posted a loss of just over $600 million in the fourth quarter.