The legal cannabis industry in Canada is facing challenges and barriers that hinder its growth and competitiveness with the illicit market. Industry representatives are calling for changes to the Cannabis Act and other policies that would provide relief and support to the sector.
Cannabis Act review offers an opportunity for change
The federal government legalized recreational cannabis in 2018 with the Cannabis Act, which came with a requirement to review it three years after it became law. The review started in September 2022 and is expected to conclude by spring 2024. It is led by a panel of five experts with backgrounds in health, law and public policy.
The review aims to address the ongoing and emerging needs of Canadians while protecting their health and safety. However, the legal cannabis industry says that some of the rules and regulations under the act are harming its ability to displace the illicit market and achieve the objectives of legalization.
The Cannabis Council of Canada (C3), which represents cannabis businesses nationally, submitted a proposal to the federal government as part of the review. It called for broad changes to the Cannabis Act, such as:
- Lowering the excise tax on cannabis products
- Reducing the restrictions on package labelling and advertising
- Ending taxation of medical cannabis
“We have a regulatory system that doesn’t make a lot of sense, that frankly prohibits the ability of legal cannabis producers to compete with illicit market products,” said Pierre Killeen, C3’s vice-president of legislative and regulatory affairs.
According to the federal government’s most recent survey on cannabis, only 48 per cent of respondents said they always get their cannabis from a legal, licensed source.
“If we want to achieve the objectives of legalization, we need a financially sustainable cannabis industry,” Killeen said. “We are government’s partners in this endeavour, although we have never really been treated by any level of government as a partner in this endeavour.”
Cannabis Industry Forum created to discuss challenges and solutions
In February 2024, the federal government announced the creation of the Cannabis Industry Forum (the Forum), a platform for industry leaders to exchange information and insights on key issues and opportunities. The Forum is composed of nine leaders who have business activities across the cannabis industrial ecosystem, which includes cultivation, processing and sales.
The Forum is chaired by Hugo Alves, CEO, founder and director of Auxly Cannabis Group Inc. The other members are:
- Philippe Dépault, president and founder of Québec Craft Cannabis Inc.
- Taylor Giovannini, president and founder of Oceanic Releaf Inc.
- Beena Goldenberg, CEO of Organigram Holdings Inc.
- Raj Grover, founder, president and CEO of High Tide Inc.
- David Klein, CEO of Canopy Growth Corporation
- Miguel Martin, CEO of Aurora Cannabis Inc.
- Rosy Mondin, president of Soma Labs Scientific Inc. and director of Cannaworld Ventures Inc.
- Tyler Robson, president of Cannabis, SNDL Inc.
The Forum’s main focus is to foster economic growth and long-term stability by upholding the public health and safety goals outlined in the Cannabis Act, while reducing the illicit cannabis market.
“For Canada to be a leader in this global economy, we require the ability to adapt to new industries and sectors that benefit Canadians. The Cannabis Industry Forum helps create innovative solutions to barriers that exist in this industry. Through active collaboration, Canada is working with industry leaders to become an innovator and leader in this changing economy,” said François-Philippe Champagne, Minister of Innovation, Science and Industry.
Legal cannabis industry hopes for a brighter future
The legal cannabis industry in Canada has faced many challenges since its inception, such as supply shortages, high taxes, strict regulations, competition from the illicit market and the impact of the COVID-19 pandemic. However, the industry also has many opportunities and potential, such as innovation, job creation, research and development, and global leadership.
The industry hopes that the federal government will listen to its concerns and suggestions, and implement changes that will help it thrive and succeed. The Cannabis Act review and the Cannabis Industry Forum are seen as positive steps to achieve this goal.
“We are optimistic that the government will take this opportunity to make the necessary adjustments to the Cannabis Act and other policies that will enable the legal cannabis industry to grow and prosper, while protecting the health and safety of Canadians and displacing the illicit market,” said Killeen.
