Canada’s Long-Awaited Cannabis Strategy Table Takes Shape

TORONTO — Nearly two years after its announcement, Canada’s government-mandated cannabis “strategy table” is beginning to show signs of activity. The initiative, aimed at addressing core challenges faced by the nation’s beleaguered cannabis industry, had been lost in bureaucratic inertia, sparking concerns among stakeholders. However, recent developments suggest a renewed momentum.

The strategy table, conceived to foster communication between the federal government and the struggling cannabis sector, recently held its preliminary meeting and elected its chair. George Smitherman, CEO of the Cannabis Council of Canada, considers the initiative a vital conduit for the cannabis sector to find an aligned governmental advocate.

Five years into cannabis legalization, Smitherman notes that the industry often feels that the very government responsible for its creation lacks genuine interest in its long-term success. The recent strides with the strategy table could mark a turning point in this perception.

Despite being heralded in the federal budget of April 2022, the strategy table had been dormant. Much of its inertia can be attributed to administrative delays within its organizing body, Innovation, Science and Economic Development Canada (ISED). This stagnation coincided with a period of significant losses for the industry, totaling over CAD 20 billion ($14.6 billion), with government-run entities seizing the majority of the profits.

The spate of business failures, combined with solvent companies grappling with governmental debt, has increased the urgency for such a strategic forum. Insolvency filings analyzed by MJBizDaily reveal the Canadian government frequently stands as the principal unpaid creditor for failing producers, a scenario uncommon in most industries.

Despite these challenges, Smitherman revealed to MJBizDaily that there’s been behind-the-scenes advancement with the ISED strategy table. The pivotal meeting in August included several cannabis industry CEOs and had significant government representation, including Morris Rosenberg, chair of Canada’s Cannabis Act review.

While this progress is promising, hurdles remain. The high attrition rate within the cannabis industry, due in part to a spate of insolvencies under the Companies’ Creditors Arrangement Act, has posed challenges. Companies like Fire & Flower Holdings, a prominent Canadian cannabis retailer, recently entered creditor protection. The industry’s volatility is inadvertently impacting the rapid formation of the strategy table.

The forthcoming months are crucial. While the strategy table’s outcomes are intended to inform Rosenberg’s legislative review, the window for such input is narrowing as the review approaches its conclusion.

Hugo Alves, CEO of Auxly Cannabis Group, was identified by Smitherman as the chair of the strategy table. However, when approached by MJBizDaily, Alves refrained from confirming this appointment.

ISED remains tight-lipped about the strategy table’s developments. Questions regarding member selection, representation of diverse entrepreneurs, and the overall direction remain unanswered. An ISED spokesperson did indicate that an official announcement regarding the table’s status is imminent. Their main objective, as expressed, is to provide a platform for dialogue on challenges and prospects within Canada’s legal cannabis industry and to heighten governmental comprehension of the sector’s economic landscape.