Canada is one of the only countries in the world that permits legal and controlled use of recreational marijuana. However, five years after the drug’s certification, the country’s cannabis industry is struggling for endurance.
George Smitherman recalls purchasing his first legal gram of cannabis in October 2018 from a Tweed establishment in Newfoundland.
The cannabis corporation had made headlines two years preceding signing a promotion agreement with US rapper Snoop Dogg, which was addressed at the time as a symbol of a new beginning in the marijuana industry.
The shop, Mr. Smitherman remembered, was “beautiful”.
“I didn’t know if I was a jeweler showroom or a spa,” he said.
He also recalls the comparison of the product he purchased versus the prominent space he bought it in – all marijuana goods in Canada are sold in nonspecific packaging with plain, government-issued stickers.
Still, it was a stimulating time, Mr. Smitherman recalls. Canada’s long-anticipated cannabis authorization had just become realism. The inflow of Investment into an innovative market that many assumed would get them rich.
Five years later, the business is confronted with economic struggles far from the passion of those early days.
Take Aurora Cannabis, for instance. The Alberta-based cannabis producer – one of the largest in Canada – publicized in August that it will be expanding its portfolio and start selling orchids.
That same month, another corporation, Canopy Growth, sold the multi-million-dollar Ontario head office it initiated in 2017, back to its initial owner, candy manufacturer Hershey Canada.
Both businesses, along with other cannabis manufacturers, have also given out pink slips to a number of workers in a struggle to reduce expenses as they continue to make little to no profit.
Experts and industry leaders say Part of the problem, is overregulation of the drug as the country tries to tow a cautious line between public health and constructing a robust cannabis industry.
Others say it’s merely a matter of too many companies and too much manufacture that surpasses demand.
And since Canada is one of the only countries in the world that legally allow the production and consumption of recreational cannabis, the choices for domestic manufacturers to make money outside Canada’s limits remain very partial.
These encounters were difficult to determine early on, said Mr. Smitherman, a past Ontario politician who is now the chief of the Cannabis Board of Canada.
“The thing is, there was no international road map,” he told the BBC, as no other country had tried to permit recreational cannabis on such a huge scale.
When Canada agreed its landmark Cannabis Act in 2018, one of its principal goals was to move marijuana users away from the illicit market to an authorized, controlled market. It was intended to keep the drug away from children and limit money flowing into the prohibited marijuana trade.
There was also the commercial dispute as well – that Canadians and the country’s economy as a whole would benefit.
In many ways, that economic benefits still hold true: Canada’s local recreational market is estimated in the billions. In 2022, Deloitte Canada valued that cannabis added C$43.5bn ($31.91bn; £26.23bn) to the gross domestic product of the country since authorization.
And Canadians can access authorized and controlled marijuana almost anywhere in the country. But they have also seemingly lost more than C$131bn investing in cannabis businesses.
Michael Armstrong, a cannabis business investigator at Brock University in Ontario, claims that early glitches cemented the way for some of the business challenges seen today.
Industry influential like Mr. Smitherman have long petitioned the government for flexible laws that, he claims, will assist the cannabis industry while not drifting away from the country’s community health objectives.
“Our dispute is: ‘Hey, if we can make some vital changes here, together, we can grow the pie,'” he said.
Despite the challenges, many still hail authorization as somewhat of an achievement. “From a public policy position, the people of Canada are very pleased with it,” Mr. Smitherman said.
“But one of the measures of achievement is, are we generating a sustainable model here where, in the following 5 years, we are going to see good cannabis businesses bringing innovative goods and winning that fight for market share, or are we going to retreat?”
Prof Armstrong informed that what Canada has is “what no other country in the world has, Now having said that, authorization is not a roaring success.”
