Cannabis Council of Canada Responds to Federal Fall Economic Statement

Ottawa, Ontario, December 16, 2024 – The Cannabis Council of Canada (C3) expresses profound disappointment with the federal government's Fall Economic Statement released today, which fails to provide any support for the struggling cannabis industry. The omission of crucial relief measures signals a concerning disregard for a sector facing significant economic hardship.

"The government's continued neglect of the cannabis sector is alarming. Their unfair taxation policies are creating an unsustainable environment for legal businesses, forcing many to close their doors and driving consumers back to the illicit market,” stated Paul McCarthy, President of C3.

A recent C3 survey revealed that the average effective tax rate for Licensed Producers (LPs) has soared to 34%, hindering profitability and long-term viability. The current excise tax formula, which imposes a fixed $1 per gram levy regardless of the selling price, further exacerbates the problem as cannabis prices continue to decline.

"This punitive tax structure makes it impossible for legal cannabis businesses to compete with the illicit market," added McCarthy. "The government is effectively undermining its own efforts to establish a safe and regulated cannabis industry."

The lack of regulatory modernization further impedes the sector's growth potential. Arbitrary measures, such as the requirement for 13 separate excise stamps, create logistical complexities and unnecessary costs throughout the supply chain. Streamlining these regulations would come at no cost to the government and would stimulate business growth, job creation, and investment in innovation.

The economic health of the cannabis industry has far-reaching implications. The sector has contributed significantly to Canada's economy through tax revenue generation, job creation, and local economic development, particularly in rural and underserved communities. The ongoing crisis jeopardizes these contributions and puts consumer safety and public health at risk as businesses and consumers are driven back to the illicit market.

"The government is letting the industry they created fail," concluded McCarthy. "The lack of safety, fairness, and economic sustainability cannot be ignored any longer. We urge the government to take immediate action to address the urgent needs of the Canadian cannabis industry."

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