Although legalizing weed was one of the biggest promises Justin Trudeau fulfilled during his first parliament as prime minister, the issue hardly came up during the election.
But now that Trudeau has been re-elected, Big Weed is lobbying for change.
The Canadian Council of Cannabis, which represents most major weed companies including Canopy, Aurora, Tilray, Aphria, and Hexo Corp., has released a letter addressed to Trudeau outlining its priorities.
The group wants the government to help wipe out the black market by cracking down on dispensaries, get rid of the excise tax (a tax placed on vices) on medical cannabis, and create a national excise stamp for cannabis products, among other things.
Here's a breakdown on what Big Weed is demanding:
Black market crackdown:
Although nearly half of cannabis consumers who participated in Statistics Canada’s National Cannabis Survey reported purchasing at least some weed legally in the first half of 2019, 42 percent said they purchased at least some of their weed from illegal sources.
And it makes sense: many regions, including Ontario, aren’t serviced by enough stores, and price, quality, and variety of product (e.g. edibles) are still arguably better on the black market. There’s been a boom of illicit online dispensaries and delivery services as opposed to brick and mortar stores, which are easier to shut down.
So the Canadian Council of Cannabis is asking for the government to “prioritize the closure and removal of both illegal brick and mortar stores, and actively seek out and shut down illegal online cannabis dispensaries.”
The letter says the federal government and provinces should work together to “increase enforcement, restrict access to youth, and remove competitive barriers to the legal cannabis industry.”
The request is being criticized because it’s calling for more people to be arrested and potentially jailed for selling cannabis, which is the same thing these multi-billion-dollar companies are doing. If Big Weed wants the black market gone, maybe it should step up its game instead of whining to the government to arrest its competitors. Just a thought.
Scrapping the sin tax on medical weed
Most medical cannabis patients in Canada already pay out of pocket for their medicine, as well as HST. But the government slapped on an excise tax of $1 per gram, or 10 percent of the retail price (whichever is more) when it legalized recreational weed last year.
Big Weed’s letter says the tax “presents serious barriers to access for patients and renders medical cannabis products unaffordable for lower-income Canadians.
The organization is calling for the government to scrap the excise tax on medical weed and to reconsider the taxing scheme on recreational weed in order to better compete with the illicit market.
Make a national cannabis stamp
The government requires each cannabis product be labelled with an excise stamp—the stamps vary from province to province. While it may not sound like a big deal, the stamps have become a pain for licensed producers. A Financial Post story detailed some of the problems with the stamps—lack of glue, late arrivals, or not fitting onto packaging have all led to delays in product shipments.
The Canadian Council of Cannabis wants the government to create a national stamp in order to expedite the process.
Europe is a growing market for medical cannabis and Canadian companies are looking to expand there. Currently, Germany has the largest medical cannabis market outside of Canada. The only weed that can be legally consumed in Germany is Canadian or Dutch, and Canadian companies are currently building domestic grows there.
The letter asks the government to “develop a comprehensive, commercial medical cannabis export framework” within the next year to help “ensure the Canadian cannabis industry’s global competitiveness while adhering to the health and safety objectives of Health Canada.”
The group wants a review of Health Canada’s licensing approval process, in the hope of clearing backlog. Health Canada was criticized during the rollout of legalization for not approving licenses fast enough, which contributed to the weed supply shortage. Some in the industry are concerned the same thing could happen with edibles licenses.