Prairie cannabis stores looking for Cannabis Act review to enable greater competitiveness with illicit market

The federal government has launched a review of the Cannabis Act legalizing cannabis in Canada, which went into effect four years ago.

The review aims to determine whether the legislation meets the needs and expectations of Canadians.

George Smitherman, President and CEO of the Cannabis Council of Canada, said he welcomed the review but wanted urgent relief from the tax and regulatory burden on legal cannabis producers to allow them to compete with the illegal cannabis industry.

“Some areas where we really need reform to better compete with the illicit market is restoring some order to financial viability for licensed participants, to give us a little more flexibility in communicating with our consumers and some to to reduce Of the regulatory burden that we are experiencing,” Smitherman said.

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Kerri Michell, President of Farmer Jane Cannabis Co., says it’s great to see the positive economic and social impact cannabis legalization is having on Canada.

“It accounts for around 11 billion retail sales and currently over 90,000 jobs, which I think is pretty significant. And we must do what we can to make sure we support the growth of the sector in Canada,” Michell said.

Smitherman said each province has a different retail model, so the consumption tax and surcharges vary from province to province, but overall the consumption tax is proving to be a much higher tax than originally promised.

“The promised tax was a 10% tax on cannabis products. But in many, many cases we have taxes that are in the 30 to 35 percent range,” he said.

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Michell and Smitherman both said one of their biggest challenges is the THC limit for edibles, which currently stands at 10mg per package.

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The Fed is launching a review of Canada’s cannabis law

The Fed is launching a review of Canada’s cannabis law

“Right now, I think about two-thirds of consumers are actually turning to the illicit market, where they can find edibles that are 10 times the legal limits. And often these are not made in a safe way, nor are they dosed in the same way,” Michell said.

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She added that while Regina has been slow to grow the cannabis space, the market here is starting to become saturated with business. “November 2021 we had 16 stores I think and now we’ve gone up to 30 with another eight yet to be built.”

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Michell said the recommendation is one store per 10,000 people, so for Regina, with around 250,000 people, that amounts to 25 stores.

“We’ve seen some discounters and some of the national players come in and really cut margins, which is actually great for consumers. There are great products that can compete with the illicit market,” she said.

Smitherman said the combined effect of high taxes, strict regulations and the resilience of the illicit market makes it difficult for companies to break into the legal cannabis industry.

© 2022 Global News, a division of Corus Entertainment Inc.

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