Is Health Canada to blame for slow growth in the Canadian cannabis industry?

Published Nov 13, 2019 01:00 p.m. ET
iStock / Kazyaka

Canadians had high hopes for marijuana legalization, as it’s premise and selling point to non-consumers was that it would help to improve the economy and create new jobs. Two things that the country has struggled with, carrying a national average rate of unemployment hovering around 15%, and a presence of poverty that is growing more with each year.

Consumers blame the government

Enthusiasts long awaited the opportunity to purchase legal marijuana plant derivatives, but the first day of marijuana legalization was nothing like long-time advocates had hoped for. With minimal options for both products and strains with a competitive THC level, consumers didn’t take long to return to the black market that had served them well long before the change.

Though consumers are certainly responsible for their decisions, it is important to support only ideas and companies that you believe in, but did customers really have a choice? Especially when so much is on the line, with stagnant wages, medical issues, and mediocre weed, there is just no way that the average person is going to benefit by making the switch.

Government blames consumers

As the excitement over marijuana legalization faded away, those who invested in dispensaries and cannabis companies were beginning to ask questions, and fight for change. Already gravely unimpressed with the brand-new system, but of course, the federal government shifted the blame right back to the citizens who are choosing black market dispensaries so much that illegal dispensaries are believed to have absorbed approximately 70% of all cannabis sales in the country.

Government places blame on producers

Since it’s the cannabis consumers that are heard the loudest, due to sheer numbers in comparison to vendors or producers, the government chose to target the producers, placing all of the blame for the shortage squarely on their shoulders, with claims that some of the largest and most experienced cultivators in the world could meet the supply they had initially agreed to. However, these accusations did not go unanswered, as impatient producers swiftly came to their own defense.

Producers blame restrictions put in place by marijuana legalization legislation

Those responsible for the cultivation of the marijuana plant products that were to be available upon the official day of marijuana legalization shot back. With many citing an incredibly slow licensing process, constantly changing rules for packaging, quality standards, and testing, alongside the country’s strange approach to doling out licenses for dispensaries as seen with Ontario’s lottery system as critical factors in the lack of zest seen in the cannabis industry.

Lack of success for Canadian cannabis dispensaries caused by Health Canada

Despite optimistic promises of a vast new revenue and bustling new industry, Canadians still have minimal access to dispensaries, and those that do exist, are the only legal cannabis businesses that can cater directly to the public. All the stores in Canada with a license have agreed to sell only approved cannabis which must go through rigorous testing and be grown by a cultivator that has permission from Health Canada.

The problem with this is that the process to get approved has an average length of around 351 days. Which means, from the day a company puts in an application for approval to grow, they must possess a facility capable of cultivation, and since it takes an entire year to get a license, those properties must be paid for and maintained for a whole year before the owners know for certain if they were approved.

It seems that one of the main causes of the lack of selection at dispensaries across Canada is the agency’s responsibility for overseeing its success, and it is acting as an unnecessary and costly barrier for producers in the country to expand, which is necessary to line dispensary shelves with more than just a handful of the same old strains. Though Health Canada certainly isn’t the only government agency to blame for the shortfall in the Canadian cannabis industry, they have certainly played an essential role in its complete lack of success to date.

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