Yes, the legalization of cannabis is a good thing. Except perhaps for investors trading the “green gold” on the stock exchanges. According to a report by a Canadian law firm, investors have already lost nearly €95 billion in four years trading shares of 183 publicly traded cannabis companies. That is €2,500 per capita has thus already gone down the drain!
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Gone up in smoke (not the cannabis but the money)
‘The Green Rush has gone up in smoke,’ said the CTV News host about the malaise in Canada’s legal cannabis industry, which has now been in existence for four years. The surely shocking calculations of the billion-dollar loss come from Miller Thomson, who works for a Toronto law firm.
Not that cannabis legalization in Canada can now be called a resounding failure. Sales of legal cannabis have been steadily increasing since October 2018. Cannabis now contributes almost as much to Canada’s Gross National Product as the dairy industry. But the best-known and largest cannabis companies have thus lost billions.
“Despite their meager performance, however, those losses have not stopped those same companies from paying out multi-million dollar bonuses to their management,” CTV News cynically observes.
Advertising bans, excessive taxes, and product restrictions
Although it doesn’t help initial investors anymore, the federal government is currently holding a legal review of the Cannabis Act, which cannabis trade representatives hope will “breathe new life into the industry.”
They are also calling on the national government to make changes regarding limited marketing and advertising rules, excessive VAT rates, and product restrictions – such as the 10 mg THC limit in edibles – that make it difficult for legal businesses to compete with the black market. A panel has been formed from the industry to advise Canadian ministers (they have two there, one separate for “mental health and addictions”) regarding the review.
The cannabis industry calls on the government for quick changes
Actually, the government has a year and a half to complete that review of the current regulatory law, but players from the legal cannabis industry are calling on the government to hurry. Also because that review of the Cannabis Act started a year earlier than intended.
“Many smaller players within the industry simply cannot wait 18 months for relief,” Omar Kahn of cannabis company High Tide told The Canadian Press recently.
Cannabis businesses discriminated against by the government
In the years leading up to legalization, Prime Minister Justin Trudeau invariably said the historic turnaround was not about making money, but about protecting public safety and public health. But that stance effectively left the industry empty-handed when it came to government programs designed to encourage business. Cannabis companies were not even eligible for corona support, although that decision was thankfully reversed later.
‘The federally licensed and regulated cannabis industry does not have fair access to various government programs and services available to virtually all industries, especially high-growth industries like cannabis,’ Kahn and George Smitherman – the president of the Canadian Cannabis Council – previously wrote in an open letter.
Whether the review creates real change remains to be seen
Both cannabis entrepreneurs also like to see Canada score internationally with cannabis; global leadership is up for grabs, so to speak. “The time has come for the government to normalize its relationship with cannabis,” they therefore believe.
It took three years for legal cannabis products to generate more sales than illegal cannabis and hashish in the province of Ontario. To continue that momentum across Canada – which was one of the goals of legalization – legal industry representatives are calling for changes in the rules of legalization. ‘Whether those changes will occur as a result of the legal review is anyone’s guess,’ CTV News said.
The world will have to wait and see, but it is yet another signal from Canada that even the “Green Revolution” is not going to happen overnight.
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First published in CNNBS, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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