Cannabis Council of Canada Calls for Industry Reforms Following Election

Following Prime Minister Mark Carney’s election victory, the Cannabis
Council of Canada called on the new government to “address glaring gaps and
shortcomings in the legal cannabis industry.”

In a statement, Paul McCarthy, president of the Cannabis Council of Canada,
said, “With a new government in office, it’s time for action. The cannabis
industry deserves the same attention and support as any sector of our
economy.”

“Canada likes to position itself as a global leader in legal cannabis – but
since legalization in 2018, the federal government has failed this industry
and the tens of thousands of hardworking Canadians it supports.” — McCarthy
in a press release

The council is calling for tax reforms, describing the current framework as
“completely misaligned with today’s market realities,” noting that at the
launch of the legal market in 2018, cannabis sold for $10 per gram, but
today, producers are seeing about $3 per gram. Yet, the excise tax remains
greater than 10% of the product’s value or $1 per gram. The council is
calling on the new government to eliminate the $1 per gram floor and
replace it with a 10% ad valorem rate – a fixed percentage based on the
value of the goods, as determined by the invoice cost – which was proposed
by the Standing Committee on Finance last year.

The group is also urging lawmakers to “eradicate the criminal forces from
the industry,” noting that illegal cannabis sales comprise between 25% and
40% of total cannabis sales in Canada and pointed to recent Government of
Canada laboratory testing that found 94% of illegal cannabis products
contained pesticides. The council suggests a strategy that includes
shuttering unlicensed storefronts and online sales, intercepting shipments
of illegal product, and launching a public awareness and education campaign
on the dangers of supporting the unregulated market.

The council is also calling for a national, single excise stamp for
cannabis products, calling the current system, wherein each province and
territory requires its own unique cannabis excise stamp, a “significant
burden” on the industry.

Since legalization, the cannabis industry has contributed over $43 billion
to Canada’s gross domestic product, with approximately $7.4 billion
contributed in 2024 alone, the group said. A recent survey found 57% of
Canadians view cannabis as important to the country’s economy, and another
62% said it could play a more significant role in the future economy.