The legislative review was due almost 12 months ago and calls for reform are echoing from coast to coast. According to Health Canada, “the legislative review must study the impact of the law on public health. In particular, it needs to look at the impact on the health and consumption habits of young people when it comes to cannabis.” With so many unlicensed weed providers operating in storefronts across the country as well as online, some industry leaders are telling the government that the health and welfare of consumers is being put at risk. When weed was legalized across Canada in October 2018, it sparked a “green rush,” but now fears are mounting that parts of Canada’s cannabis industry could go up in smoke. CTV National News spoke with the former CEO of cannabis behemoth Canopy Growth, the president of the Canadian Cannabis Council and a brand partnerships expert who currently works for a company that connects consumers with black market products. While nearly everyone working in the marijuana game agrees wholesale changes are needed, finding consensus on how to move forward remains elusive. Industry complaints range from high taxes, government overreach and advertising restrictions to the spread of the black market. Leafythings, an online cannabis catalog, recently received the award for “best innovative technology” at a national industry gala, although their big win drew attention mainly because the products they offer online come from both licensed and non-licensed companies. controlled retailers – something lawmakers still label as illegal. Nima Derak, the company’s director of corporate brands, describes those in the black market as “independent operators who want to enter the market — most of them want to enter the (legal) market, but because of the government’s financial obstacles. I’m really struggling.” In major urban areas across the country, pot shop owners are sounding the alarm, claiming provincial governments are handing out too many retail licenses, causing city streets to fill up with shops. Look no further than Toronto, which now has more weed shops than Tim Hortons locations. “A lot of these mom and pop businesses are going to go out of business, they’re going to lose their savings,” Derek adds, though many legal cannabis shop owners point to the black market as a big part of the problem. . George Smitherman, president of the Canadian Cannabis Council, believes that “the playing field is not level at all. There are illegal retail storefronts, there are also significant illegal delivery services that are also largely ignored (by the authorities).” A report commissioned by the Cannabis Council of Canada notes that in Ontario, each gram of weed is taxed more than 27 per cent collectively by the provincial and federal governments. The Ontario government then applies an additional markup of nearly 19 per cent — that’s all before a product reaches the market for sale. “No other sector could face such taxation,” claims Smitherman. Meanwhile, the black market operates without paying a single penny of taxes on their products. Smitherman believes that authorities and prosecutors need to find a way to stop illegal businesses. “There is a significant body of regulation, but there is not enough law on the books to stop the obvious illegal operators and nobody is doing anything about it,” he said. Large-scale regulated cannabis growers and producers also find themselves with a smaller piece of the pot pie, with mass layoffs and falling shares of Canadian industry majors like Aurora Cannabis and Canopy Growth. In 2019 Canopy Growth’s stock reached nearly $70, today it has fallen to around $4 per share. The company declined our request for an interview, but its former CEO Bruce Linton spoke to CTV National News, noting that Canopy’s “actual sales numbers, the dollars of cannabis sold, are going down while the market is growing. So they sell less overall revenue.” Linton wants to see government restrictions on marketing and advertising loosened so that regulated growers and producers can compete with the black market which has no restrictions on their packaging or the strength of their edible products. “If you want to have a legitimate, regulated, secure success system, it has to be able to sell product that you can identify with, relate to, and build off of,” notes Linton. Derek and his colleagues at Leafythings believe that there is a way for everyone to succeed. It calls for a “system similar to Canadian food standards where growers and brands can hold samples of their product and send samples to independent laboratories for testing and distribute them directly to regulated businesses.” He also claims that many of the black market businesses would be open to paying taxes if “excessive” government regulations were removed. Smitherman, who was previously Ontario’s health minister, believes Derak and others are “trying to make the illegal market work better for themselves,” not for the industry and consumers as a whole. “Our target is legal-age consumers, giving them the right to choose where to buy and what to buy,” Derak responded, noting that Canada’s cannabis industry “as a whole is a $6 billion market and we’re neglecting half of it 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 devolved 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 spinning its wheels as the world watches, all eyes will now turn to the Canadian government’s cannabis law overhaul. In an email to CTV National News, Health Canada states that “the government is committed to putting in place a credible, evidence-based legislative review process that will assess the progress made towards achieving the objectives of the Cannabis Act ». As the government prepares to announce its plans for how it will overhaul the Cannabis Act, this week Aurora Cannabis reported a fourth-quarter loss of just over $600 million.
