The legalization of cannabis has been a social and economic success for Canada and for the Trudeau Government. Almost 50,000 jobs have been created and governments have generated $15 billion in new revenues. On the social front, youth and young person’s consumption of cannabis has trended downwards (Canadian Cannabis Study 2021) while none of the public safety fears have materialized – cannabis at work, cannabis behind the wheel, social disorder, etc.
Against this promising backdrop, lies the micro-economic realities of cannabis licence holders. The financial viability of license holders is under intense pressure, with the prospect of many licensees closing down over the course of the next year. This pressure is a function of significant price compression resulting from an abundance of illicit market cannabis and the combined financial impact of federal and provincial taxes, provincial mark-ups, fees and regulations. Regardless of size, licence holders are operating at a loss and those that do not are a “mistake” away from losing money.
The achievement of the public policy objectives of legalization depends upon the ability of licence holders to supply legal cannabis products to consumers and to develop and offer innovative (non-combustible) products to consumers. If Canada wants to protect the progress to date, eliminate the illicit market, and “grow the pie” for governments, we need the Government of Canada to change its approach to legal cannabis.
This panel will bring together leaders from a range of licence holders to share their perspectives on the financial viability of cannabis licence holders and their recommendations for a healthy legal cannabis industry.