A review of Canadian legislation that seeks to address key issues in the country’s cannabis industry has been delayed. The Cannabis Act is in need of a mandatory review that was scheduled for October 2021, three years after Canada made it legal to use marijuana for recreational purposes. According to Tammy Jarbeau, a health spokesperson, a legislative review is currently in the works.
Once the review launches, the industry seeks to address issues, some of which are not covered in the Cannabis Act. Some of those issues include excise taxes, potency limits of products, and the marketing and advertising of cannabis products. According to industry sources, the September elections, the installation of a new health minister and the pandemic are possible reasons for the review’s delay.
Last year, the Cannabis Council of Canada was in discussions with Health Canada, which wanted to narrow the review. The review is expected to have an impact on public health, Indigenous communities and legal home cultivation. George Smitherman of the Cannabis Council states that the concern of public health is important in addressing the country’s illicit market of cannabis. According to Sean Webster, an official for Ontario-based producer Canopy Growth, there are broader issues around regulations that need to be looked at in addition to the review of the mandatory issues.
The industry wants a review that will allow for an increase in the THC limit of cannabis products. According to Webster, the illegal market has products, which consumers are demanding, that claim to have more than the 10-milligram THC limit.
Health Canada’s framework on costs levied on earnings made by cannabis growers is another subject that needs to be reviewed. According to Vlad Klacar, a senior vice president at Auxly Cannabis, taxes are a burden to growers, businesses and enterprises that are still finding their way through this emerging sector. He suggests that the fees could be charged on projects or be tied to service standards.
Another concern is cannabis excise taxes, which are grouped under the Excise Act instead of the Cannabis Act. This means that the regulations come from the Department of Finance and the Canada Revenue Agency instead of Health Canada. The Ontario chambers of commerce together with British Columbia are demanding tax reforms.
It is expected that the review will end after 18 months from commencement with a report containing findings and recommendations presented to the Canadian Parliament. Webster states that the industry is ready for the review and is interested in how the process will play out. Entities such as Flora Growth Corp. (NASDAQ: FLGC), which have their eyes on an international market, are particularly interested in the review outcome.
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