Cannabis action to look at when the industry hits obstacles

Nearly four years after marijuana was legalized in Canada, the federal government will finally announce its plans on Thursday for a review of the country’s long overdue Cannabis Act.

The legislative review is said to have taken place nearly 12 months ago, and calls for reform are ringing from coast to coast.

According to Health Canada, “legislative review must study the impact of the Act on public health. In particular, it must consider the impact on health and consumption habits of young people towards cannabis.”

With so many unlicensed weed suppliers operating in stores nationwide as well as online, some industry leaders are telling the government that the health and well-being of consumers is under threat.

When weed was legalized across Canada in October 2018, it caused a “green rush,” but fears are now growing that parts of Canada’s cannabis industry could melt away. into smoke.

CTV National News spoke with the former CEO of Cannabis behemoth Canopy Growth, the president of the Cannabis Council of Canada, and a brand partnerships expert who now works for a company that is connecting people. consumption of black market products.

While nearly everyone working in the cannabis game agrees that wholesale price changes are needed, finding consensus on how to move forward remains elusive.

Industry complaints range from sky-high taxes, excessive government access and restrictions on advertising to the proliferation of the black market.

Leafythings, an online cannabis directory, was recently awarded the “best innovative technology” award at a national industry gala, though their big win was largely turned by the the products they offer online come from both licensed companies and unregulated retailers – something lawmakers still point to as illegal.

Nima Derak, the company’s director of brand partnerships, describes those on the black market as “independent operators looking to enter the market – most of these people want to enter the market (in the case of legislation) but because of the government’s financial barriers they’re really struggling to. “

In major metropolitan areas across the country, regulated pot store owners are sounding the alarm that provincial governments are issuing too many retail permits, leading to streets in The city becomes saturated with shops. Look no further than Toronto, which now has more weed shops than Tim Hortons locations.

“A lot of parent companies and pop businesses are going bankrupt, they’re going to lose their life savings,” adds Derak.

George Smitherman, president of the Cannabis Council of Canada, believes that “the playing field is nowhere near qualifications. There are illegal retail storefronts, there are also substantial illegal delivery services that are also ignored by the authorities (officials).”

A report commissioned by the Cannabis Council of Canada notes that in Ontario, every gram of weed is taxed by more than 27% by the federal and provincial governments. The Ontario government will then apply an additional markup of nearly 19% – that’s all before a product is put on the market for sale. “There is no other sector that can cope with such a tax,” Smitherman stated.

Meanwhile the black market still operates without paying a penny of tax for their products. Smitherman believes that authorities and prosecutors must find a way to shut down illegal activities. “There’s an important regulatory body, but there’s not enough legislation in the books to stop the obvious illegal operators, and nobody’s done anything about it,” he said.

Large-scale regulated cannabis growers and producers are also finding their way into a smaller piece of the pie, with mass layoffs and plummeting shares at major Canadian industry players like Aurora Cannabis and Canopy Growth.

In 2019, shares of Canopy Growth were close to $70, today it has dropped to about $4 a share. The company declined our request for an interview but its former CEO, Bruce Linton, sat down with CTV National News, noting that “Canopy’s actual sales of cannabis have declined in the past year. when the market is growing. So they actually sell less total revenue. “

Linton wants to see the government relax restrictions on marketing and advertising so that growers and regulated producers can compete with the black market, who don’t have any restrictions on packaging or potency of their edible products.

“If you want to be successful with a legitimate, regulated, and secure system,” notes Linton, it must be able to sell products that you can identify, link to, and build from. idea.

Derak and his colleagues at Leafythings believe there is a way for everyone to succeed. He calls for “an established system similar to Canadian food standards, where growers and brands can keep samples of their products and send them to independent labs.” for testing and direct distribution to regulated businesses.” He also stated that many black market businesses would be willing to pay taxes if the “abuse” of government regulations were repealed.

Smitherman, who was previously health minister in Ontario, believes Derak and others are “trying to make the illicit market work better for themselves,” not industry and consumers say. shared.

“Our focus is on consumers of legal age, giving them the power to choose where they buy and what they buy,” Derak countered, pointing out that Canada’s cannabis industry “is generally a a $6 billion market, and we’re skipping half the market. It’s time to bring that money in and start contributing to Canadian society.”

When cannabis was first legalized in Canada, the federal government downloaded regulatory responsibilities down to individual provincial governments, creating a patchwork system, with different laws and regulations depending on the state. where you are in the country.

For an industry that is turning its wheels as the world watches, all eyes will now be on the Canadian government’s review of the Cannabis Act. In an email to CTV National News, Health Canada stated that “The Government is committed to a credible, evidence-based process for legislative review that will assess progress made to achieve this goal.” achieve the goals of the Cannabis Act.”

With the government set to announce its plans for how it will review the Cannabis Act, this week Aurora Cannabis reported a fourth-quarter loss of just over $600 million.

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