Aleafia Health Inc ALEAF

Good article on weed industry in Canada

[sthinei]

I am hopeful some of these changes will happen as the illegal market has been shrinking but purely on the backs of the legal producers.  This possible change cant come soon enough but it would be a game changer.

https://ca.finance.yahoo.com/news/canadas-cannabis-industry-has-a-policy-wishlist-for-2022-but-will-anything-change-131129921.html

Some of the biggest challenges facing the industry extend beyond the scope of the Cannabis Act. Among those, Smitherman says, is the falling price of legal recreational pot. The industry's roll-out of low-price, bulk bags of pot aimed at luring customers from the illegal market has weighed heavily on the balance sheets of producers. Many are now desperate to abandon discount products designed to rapidly expand their market share.

"We are fighting it out on price with the illicit market, and the fight is being borne almost entirely on the back of licensed holders who are largely not profitable, while governments who actually have the public safety responsibility to eliminate and reduce that illicit marketplace are making off like bandits," Smitherman said in an interview.

The Ontario Cannabis Store, the province-run online retailer and monopoly supplier to private stores, says in its latest quarterly review that legal sales overtook illegal channels for the first time in the province between July and September. Ontario projected in its Fall Economic Statement that its cannabis business will make $155 million in profit this fiscal year, up from $67 million the prior year, and $19 million two years ago. The province also expects to receive $185 million in revenue this year from federal cannabis excise duties.

In order to ease pressure on producers from lower prices, Smitherman wants to see the excise tax rules adjusted, another issue outside the scope of the Cannabis Act.

Canada's excise duty on dried cannabis flower is either $1 per gram or 10 per cent of the value of the gram, whichever is greater. Flower sales make up the bulk of cannabis purchases. Falling prices have meant that $1 equates to a larger portion of the sale. A campaign launched by craft cultivators says the tax is costing them 20 to 30 per cent of their topline revenue, a figure they claim is often higher than the salaries on their payroll.

[Tan4646]

I thought the initial point of legalization was to allow recreational smokers to grow, share, comsume all the pot they liked to drive out organized crime and stop treating teenagers getting high like criminals.. Are  you saying that you want  a select group of well financed  growers to control the supply, distribution and price and make those recreational smoking, growing, sharing

[KeyserShoze]

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[sthinei]

I think decriminalization was part of it but just based on the the amount of excise taxes and OCS monopoly it is also abviously about making money. If the companies cannot make money then it plays into the hands of the illegal producers. There has already been a lot of consolidation but situation not getting significantly better because even for the larger names who have acquired multiple smaller

[Tan4646]

Ageed,  the idea of decriminalization seemed noble enough but like alcohol and tobacco the various levels of government had to develop regulations and tax revenue schemes to make it socially and politically acceptable. In my opinion the convience of having a store down the block, with advice and  variety of brands makes the overall industry viable over the long term. As mentioned how