The state of cannabis in Canada
Nov 16, 2018
Terry Booth doesn't hold back:
The CEO of Aurora Cannabis says that Ontario and British Columbia “shat the bed” when rolling out their retail models for recreational cannabis, and that the only provinces that “got it right” were Alberta and “perhaps Saskatchewan.”
The smaller Eastern provinces are doing alright. Booth is right about Ontario and British Columbia which have a combined total of one retail cannabis store open at the moment.
“We knew it was going to be a shit show,” he said. “The government sold us tax stamps that didn’t have glue and so our Plan B was getting a bunch of people with very wet tongues to start licking these stamps.”
The rules and regulations are extremely onerous for Canadian marijuana producers. People joke about how easy and cheap it is to produce. Hey, after all, it's called a weed! The producers are finding out that it's very difficult to grow at scale. Growing it in a basement is different than growing it in areas which are the size of multiple football fields. Plus, the licensing, security, and other bureaucratic requirements makes it incredibly expensive. Then, on top of all that, the government adds its retail margin, excise tax and sales tax. Then the customers complain that the guy down the street offers a better price!
“We spent a lot of money on branding, we sponsored concerts, events. We can’t do that right now. I’d be off to f–king jail if we brand like that,” Booth said, to laughter and some gasps from the audience. The Cannabis Act prohibits any form of advertisement and branding that depicts the cannabis plant itself and presents its consumption as a lifestyle.
American companies will build global brands and eventually slaughter almost all the Canadian marijuana businesses when Trump legalizes cannabis at the federal level. This is one big advantage for Canopy: it has become, in effect, an American-owned business. If you can't beat 'em, join 'em. Let's see whether Aurora Cannabis can align itself with a giant, cash-rich, American firm for long-term survival.
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