Navigating Uncertainty Amid Political Shifts
In our latest Online CANNAtalk discussion, we took a deep dive into the evolving political landscape and its impact on the Canadian cannabis industry. With Canada’s Cannabis Act under review and uncertainty heightened by the Prime Minister’s resignation, the industry faces a critical turning point. Meanwhile, shifts in U.S. leadership and the looming threat of tariffs add further complexity to cross-border trade. To unpack these pressing challenges, we gathered top industry experts to explore how these developments could reshape cannabis operations and the market at large.
Watch the video:
Navigating legislative uncertainty in the Canadian cannabis industry
With Parliament adjourned until at least March 24, Canadian cannabis producers face uncertainty regarding pending legislative changes. While the proposed amendments are largely housekeeping measures aimed at improving industry efficiency, delays could arise if they are not approved before a new Liberal leadership is selected. If an election is called, all legislative progress would be tabled indefinitely.
Preparing for a potential government change
If polling trends hold and a Conservative government is elected, cannabis businesses must proactively educate new leadership to ensure the industry’s needs are understood. Even within the Liberal Party, a leadership change does not guarantee the same pro-cannabis stance as under Prime Minister Trudeau. This underscores the urgency of industry players engaging with local representatives now.
Lobbying & industry-led solutions
While lobby groups like C3 could play a role, the industry lacks a unified voice. Instead of waiting for government intervention, the sector must collaborate internally to propose its own solutions. As Scott Samuel suggested, learning from other regulated industries (e.g., alcohol, film) will help to navigate policy changes more effectively.
Including other stakeholders impacted by cannabis regulations such as municipal politicians or law enforcement in our lobbying efforts will help bolster our need for government support and elevate our voices.
Taxation challenges & finding profitability
Despite ongoing discussions around tax reform, meaningful change is unlikely in the short term given the revenue cannabis generates for the government. Political optics also make tax reductions a tough sell. With bankruptcies and CCAA filings seen as normal attrition in a maturing industry, businesses must focus on:
- International market expansion (though regulatory hurdles exist)
- Operational efficiencies
- Product diversification
Export considerations
International expansion continues to be an attractive alternative, especially given the weakened Canadian dollar. However, Deepak Anand cautioned that exporting is not a fit for every company, given the complexity of international regulations. As some companies pivot to global markets, it may create domestic opportunities for those focused on Canadian consumers.
Key Takeaways:
- Push for legislative changes before a potential election disrupts progress.
- Educate political leaders on industry needs, regardless of party affiliation.
- Collaborate on industry-led solutions instead of waiting for government action.
- Focus on operational efficiency, diversification, and market expansion to drive profitability.
- Monitor and explore international opportunities while weighing regulatory challenges.
