Cannabis Council of Canada Congratulates Mark Carney and Calls for Immediate Action to Strengthen Canada’s Legal Cannabis Industry

OTTAWA, Ontario--(BUSINESS WIRE)--The Cannabis Council of Canada today congratulated Mark Carney on his election victory. As the new government takes shape, the Council renewed its call for policymakers to address glaring gaps and shortcomings in the legal cannabis industry.

“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,” said Paul McCarthy, President of the Cannabis Council of Canada. “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's cannabis industry is a major driver of economic growth - since legalization it has contributed over $43 billion to the national GDP, with approximately $7.4 billion contributed in 2024 alone. To keep that momentum going, key policy changes are needed to ensure the industry can grow, compete and innovate.

The solutions to unlocking the industry’s growth and potential are achievable and clear.

The current excise taxation framework is completely misaligned with today’s market realities. When it was introduced in 2018, cannabis sold for approximately $10 per gram. Today, producers are receiving as little as $3 per gram – yet the excise tax remains the greater of 10% of the product’s value or $1 per gram. This has created a crushing and unintended tax burden that now is three times higher than what was originally envisioned. Instead of thriving, licensed producers are being pushed to the brink – many are unable to meet their tax obligations and are being forced out of the market, taking good jobs with them. If not fixed, Canada risks losing the very businesses it once championed through legalization.

The Cannabis Council of Canada calls on the Government of Canada to eliminate the $1 per gram floor and instead apply a 10% ad valorem rate as proposed by the Standing Committee on Finance in 2024.

The industry’s challenges extend well beyond taxation. Since legalization, the previous government largely turned a blind eye to the persistent illicit cannabis market, allowing criminal actors to thrive at the expense of licensed businesses. This undermines the foundation of legalization and the promise of a safe, regulated cannabis industry. Illicit cannabis is estimated to make up between 25% and 40% of total sales in Canada – an unacceptable reality that demands urgent federal action. For the cannabis industry to thrive, the Government of Canada must act to eradicate the criminal forces from the industry.

Elements of a comprehensive strategy must include tackling illegal production, shuttering illegal storefronts and online sales, interdicting shipments of illegal product, and launching a public awareness and education campaign on the dangers of supporting the illicit market. Many consumers who purchase cannabis online do not realize they are purchasing illegal products, nor do they recognize how harmful these products can be. Not only do these transactions support other crimes, but they also pose a significant threat to public safety.

A recent Government of Canada laboratory test showed that 94% of illegal cannabis products contained pesticides. They also found traces of Escherichia Coli, indicating the presence of fecal contamination.

Finally, in the spirit of building a more resilient Canada and removing interprovincial trade barriers, the Cannabis Council of Canada also calls on the Government of Canada to work with the provinces and introduce a single national excise stamp for cannabis. The cannabis excise stamp is a regulatory tool indicating tax compliance – which the legal industry supports.

However, under the current system, each province and territory requires its own unique cannabis excise stamp. This red tape adds costs and complexity for legal producers distributing products nationwide, placing a significant burden on an industry that is committed to being law-abiding, consumer-focused, and financially viable. The December 2024 Fall Economic Statement signalled the federal government’s intention to adopt a single national stamp. The Cannabis Council of Canada welcomes this signal and urges the government to deliver on that commitment without delay.

The Cannabis Council of Canada once again congratulates Prime Minister Mark Carney. Our industry is asking the Government of Canada to remove the shackles which is preventing further economic growth and ensuring that Canada is a global leader in the legalized cannabis industry.