OPINION: High time government normalizes its relationship to cannabis

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By GEORGE SMITHERMAN and OMAR KHAN

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The cannabis sector contributed $17 billion to Canada’s gross domestic product for the year ending July 2021.

In the span of three years, adult-use and medical cannabis’ contribution to Canada’s GDP has grown to rival the dairy industry’s $20 billion GDP.

The growth shows no signs of slowing.

Sales of legal cannabis products by licensed dispensaries will eclipse $4 billion on an annualized basis in 2021 and is projected to surpass $5 billion in 2022 . Illicit cannabis sales, brazenly marketed and distributed to Canadians, are estimated to be at least as big as the legal market (another $4 billion or so per year).

Compared to alcohol, Canadian cannabis sales have or will soon surpass the yearly retail sales of wine ($8 billion) or beer ($9.3 billion). It’s worth noting that, unlike beer or wine, all adult-use cannabis sold in Canada is produced in Canada, magnifying the impact of cannabis on Canada’s GDP.

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Put another way for the politically inclined, the legal cannabis industry enjoys impressive scale and broad geographic distribution.

With these GDP and retail sales numbers, you’d expect that the Government of Canada would take notice of the potential of a rapidly growing cannabis industry to contribute to its social and economic agenda. Yet, the common refrain is that the government does not have an economic lens on the cannabis industry.

  1. Minerva Cannabis on Bathurst south of Dupont Sts. is set to open in early October.

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  2. View of cannabis plants at the Medical Cannabis Research and Patient Support Association (APEPI) production farm in Paty dos Alferes, Rio de Janeiro state, Brazil on September 9, 2021.

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  3. Cannabis vapes, chocolates, chews, and a tea made up the Ontario Cannabis Store's sneak peek on Jan. 3, 2020 at the initial selection of cannabis edibles, extracts, and topicals before they officially hit legal store shelves.

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As a result, the federally licensed and regulated cannabis industry lacks fair access to various government programs and services available to almost all industry sectors, especially high-growth sectors such as cannabis.

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With equitable access to the federal government’s ambit of programs and services, the cannabis sector can generate even greater economic and social benefits for Canadians.

To date, cannabis licence-holders have created tens of thousands of high-value jobs in hundreds of communities across every province. Legal retailers have also created thousands of jobs at 2,800 locations across Canada. Indirect jobs have been created by new and established ancillary service providers.

The legal cannabis sector is collaborating with colleges and universities on the research and development of innovative products for the health and wellness market. The export of medical cannabis promises to be a multi-billion-dollar industry, with global leadership up for grabs.

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Collaboration among licence-holders, legal retailers and government on enforcement could enhance public safety and eliminate the diversion of hundreds of millions of dollars in tax revenues. Rethinking and revising “nanny state” over-regulation will empower the legal industry to compete with unbridled illicit market producers and sellers.

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With three years of legal cannabis and three federal elections behind us, the time has come for the government to normalize its relationship to cannabis. The acceptance of cannabis in political and governmental elites lags far behind Canadians’ acceptance of cannabis.

For “Official Ottawa,” this means ending the current practice of funnelling off the cannabis industry to Health Canada only to be told that Health Canada doesn’t have an economic mandate.

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With a willing government partner, the legal cannabis industry could add to its already sizable contribution to Canada’s GDP, while supporting the Government of Canada’s efforts to create a sustainable economy and a diverse, inclusive and equitable society.

— George Smitherman is president and CEO of the Canadian Cannabis Council, the national representative of licensed producers and processors of cannabis, and previously served as Ontario’s minister of Health and Long-Term Care.

— Omar Khan is senior vice president of corporate and public affairs at High Tide Inc., Canada’s largest retailer of recreational cannabis.

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