[ad_1]
I’ve been writing on the issues that plague today’s cannabis industry for awhile; from lay-offs to insanely strict regulation, to a lessening of sales. Recent news of a sales decline from the Great White North, shines light on problems within the marijuana industry of Canada; and how the governance of that country is trying to figure out new regulatory methods, to help things out.
Canada & its marijuana industry
Canada was the second country to legalize recreational cannabis and start a marijuana sales industry. It did so with bill C-45, which passed the Senate on June 19th; with one fought over amendment taken out before the final vote. The amendment would have made it illegal to sell or advertise branded products, which is paradoxical to a general legalization. Luckily, the House of Commons, which passed the bill first, re-passed it without that amendment. On October 17th, 2018, it became law.
Technically, Canada is the third country for the enaction of cannabis use legalization, although the second, after Uruguay, to open a full market. In between Canada’s bill passing, and implementation, the former Eastern Bloc country Georgia legalized the possession and use of cannabis via a Supreme Court ruling, on July 30th, 2018. Unlike Uruguay and Canada, however, this didn’t include any further framework for a sales market, and left the population in the same limbo that continues; wherein, possession and use are legal, but cultivation and sale are not.
Back to Canada now, where each province is afforded the right to set its own specific rules on the regulation of cannabis sales, as per the passed measure. However, given this, certain country-wide laws are set. The age of legal use is 18, and anyone of that age or above has the legal right to possess up to 30 grams of dried cannabis, or the equivalent in fresh form. This also extends to food and drinks made with cannabis products.
Thanks for being here. Sign up to the Cannadelics Weekly Newsletter for email updates; and for great deals on cannabis buds, vapes & smoking devices, edibles, cannabinoid compounds (like delta-8), amanita mushroom products, and a ton more. Come get the good stuff here!
The law also gives the legal ability for self-cultivation, and allows each household the right to grow up to four plants. The provinces of Quebec and Manitoba opted not to have this part of the law apply to their residents; and there have been legal battles over this specific issue ever since.
The recreational legalization came many years after the country instituted a medical program; that started back in 2001. Originally, everything was done through Health Canada, which directly offered patients access to cannabis and cannabis products. This changed in 2013 with the implementation of a more standard sales market, and the introduction of dispensaries.
Canada and its cannabis industry sales decline
The bad news is all over the place; and now Canada is a part of it too. New data shows a 7.1% slip in adult-use sales from December 2022 to January 2023. In Canadian dollars, that means a drop from CA$425 million in December, to CA$395 million (adjusted) in January.
A sales decline was seen in every province, save for one, Saskatchewan. In Saskatchewan, there was a 12.6% increase in cannabis sales in that same time period. It had January sales of $19.1 million in Canadian dollars, up from CA$16.9 million in December.
How exactly did the other provinces fair? The biggest market, Ontario, saw a drop of 9.5%, from CA$171 million to CA$155 million. Quebec and Nova Scotia were right behind with drops of 9.3% and 9.2%, respectively, with January sales numbers of CA$49.5 million and CA$9 million, respectively (from CA$54.5 million and CA$9.9 million, respectively). New Brunswick trumped all three with a drop of 14.8%, which was the biggest percentage drop for any province. As a smaller market, this led to CA$6.5 million in sales for January from CA$7.6 million in December.
Yukon also had a big percentage drop of 12.7%, but for the tiny province, this meant sales of CA$843,000 in January from CA$966,000 in December. Prince Edward Island had the third biggest losses in terms of percentage drop, going down 11.6%, with January sales of CA$1.7 million from CA$1.9 million in December.
On the lower end for percentage drops, British Columbia went down 3.9% with CA$60.6 million coming in in January from CA$63 million in December. Alberta lost 5.8% in sales, for CA$69.5 million in January from CA$73.7 million in December. Newfoundland declined 6.1% which led to CA$6 million for January from CA$6.4 million in December. And Manitoba saw an 8% drop, with sales going down to CA$16.8 million in January from CA$18.3 million in December. No statistics were reported for Nunavut or the Northwest Territories, but as tiny markets, they have less affect on overall Canadian cannabis sales.
Does this mean people in Canada decided to use less weed? Not exactly. The information comes from Statistics Canada, and shows a December total of CA$425.8 million, and a January 2023 total of CA$395.5 million. But it also shows there had been growth prior to this, at the rate of approximately 14.1% for 2022, up until that point. In fact, according to the same agency, the total legal sales for 2022, were CA$4.5 billion.
How much does this information matter?
Sales aren’t always consistent, and can go up and down in life, right? Should it matter then that after a generally good year of sales in 2022, that the beginning of 2023 has lower numbers? What does it actually say about Canada and its marijuana industry? Perhaps if we weren’t seeing slipping sales in other countries, mass layoffs, the institution of weird charges like slotting fees, and all kinds of company restructuring to save money, it might not have. But all those issues exist, showing a general pattern of decline.
Its worrying enough to the Canadian government, that it’s looking to take action. On March 25th, the federal government posted a notice of intent to start consultations on how to make the industry more efficient in terms of licensing, security, production, and packaging and labeling. As per the notice, the “legal cannabis industry has matured, the marketplace has evolved, and there is increased knowledge and data on public health and public safety risks associated with certain activities.”
It continues, “Health Canada recognizes there may be regulatory measures that could be made more efficient and streamlined without compromising the public health and public safety objectives in the (Cannabis) Act,” and that this might include “(reducing) administrative and regulatory burdens where possible.”
The notice listed five specific areas of investigation for this purpose: licensing, personnel & security, production requirements, packaging and labeling regulation, and records & reporting. For each category Health Canada poses questions in preparation for future consultations.
What kind of questions? For licensing, it asks if licenses and permits are needed for everything they’re currently attached to, and if any new use can be authorized for cannabis. For personnel and security, it wants to know if current regulation can be minimized without compromising safety. In terms of production regulation, it wonders if all current requirements are necessary, and points to less restrictive fields like medical devices and cosmetics, which enjoy lesser regulation. It also asks if there’s a way to promote micro-cultivators and micro-processors through regulation.
When it comes to packaging and labeling laws, the agency questions whether all current regulations are necessary, and if some can be dropped, including the requirement of including certain information on labeling. And for records & reporting it questions if amendments can be made in regards to what it calls “onerous and duplicative requirements”, something for which many complaints have been made.
The consultation period goes until May 24th. To actually change laws will require more than feedback though. The agency reminds that any changes that might come into play, must be consulted on by stakeholders before anything further can happen.
What should we expect?
Truth is, the marijuana industry in Canada has been plagued since the get-go. Between ridiculously strict regulation that doesn’t match the risk (never has), and a black market that’s been in existence for as long as weed has; it really never grew the way it should have. With a new industry, there’s nothing to compare sales against, so while news stories blared over the past few years about how well the industry was doing, there was always the issue of the ever-present black market.
In a Star article from earlier this year, it says the black market still accounts for approximately 43% of sales in the country. It also says illegal sales have gone down by nearly half since the beginning of the legal market. How exact are these numbers? Not at all, as black markets don’t report earnings. But regardless of how much black market sales might have fallen, or exactly where they are now, they clearly account for a large chunk of the market.
On top of that, Canada’s sales market was previously estimated to be at CA$7 billion by now, meaning, not only did it not reach this point, but it might be showing signs of a major downturn from what it originally accomplished. Also good to remember that it’s the Canadian government via Statistics Canada that put out this information, which might be minimized to make things look better than they are. As its unlikely that regular users stopped using, if there are deficits in the legal market, it’s a good bet that that money was instead earned by the black market.
Conclusion
The recent hit Canada took to its marijuana industry is troubling in general for the fate of all legal markets. If dispensaries are a fad, and that fad wears off (or is cannibalized by illegal dispensaries), then how much can the industry really expect moving forward? Yeah, Canada should loosen restrictions, but it shouldn’t have come to this. And that large governments continue to make such ridiculous mistakes on this front, doesn’t personally give me much hope for the future of legal markets.
Welcome to the site! Thanks for making your way to Cannadelics.com; an independent news site that digs deep into the worlds of cannabis and psychedelics. Come our way frequently to stay in-the-loop on important stories, and subscribe to the Cannadelics Weekly Newsletter, so you’re never late to get the news.
Related
[ad_2]
Leave a Reply