Article by Yasmin Shaker, Financial Posts
The headlines haven’t been encouraging for Canada’s cannabis industry lately. The press reports the industry is bracing for a wave of insolvencies as companies run short of cash and lay off workers. There are several reasons for this but a main problem is over-supply and an inability to get product to markets. This is especially the case in Ontario, where the roll-out of retail stores has been and continues to be painfully slow..You might think businesses experiencing over-supply would pursue other markets and that governments would support companies in their efforts to go global. This federal government, like others before it, has encouraged Canadian business to seek opportunities in the global marketplace. That’s not just a part of our “brand,” it’s a necessity. Our market is small. To grow and thrive we need to sell into world markets..Cannabis is not a typical commercial product, of course. But the international trade of medical cannabis is legal and countries that have legalized cannabis, such as Australia, South Africa, Colombia, Germany and Israel, are both exporting medical cannabis and in many cases, importing it as well. Some Canadian companies are also doing business internationally, often through their subsidiaries elsewhere. The reason is simple: some estimates put the global medical cannabis market at US$44 billion by 2024. For the Canadian cannabis industry, which was one of the first out of the gate, that’s an opportunity we shouldn’t miss..But rather than support Canadian exports of medical cannabis, the federal government has been actively discouraging it. Health Canada’s policy limits imports to tiny amounts for medical testing and R&D only and it doesn’t allow commercial imports at all. As a matter of law, exports are permitted. But the industry has encountered delays in obtaining the permits that exporting requires. And if we do want to establish a successful export trade, we have to be more open to imports..Part of the problem is that Health Canada has not introduced binding service standards, so officials do not have hard deadlines they need to meet. As a result, and in contrast to other industries, cannabis producers have no idea how long it will take to have their permits reviewed, accepted or denied..The root of the problem is that the mandate to legalize cannabis was given to Health Canada alone. It quite naturally focuses on public health and safety. In general, it has done an impressive job of ensuring the industry rolls out in a safe and responsible way. But, perhaps not surprisingly, its policy framework fails to take into account or even acknowledge that the cannabis industry generates jobs and incomes and, if it is going to thrive, needs to grow both domestically and internationally.