The merger of corporate and government power continues unabated with a “cannabis industry table” included in last week’s federal Liberal-NDP budget.
Three years after Canada legalized cannabis, the landscape is not what many were expecting. By initially shutting out the legacy market and giving large licensed medical producers first dibs on recreational retail, Canada’s cannabis industry was lining up to look like our telecommunications industry. That is, high prices, even higher barriers to entry, and as consequence, a protected cartel.
Instead, consumers demanded premium craft products. The LPs who began with a sea-of-green monocrop are now scrambling to market themselves to the connoisseur consumer.
Hence, why the federal Liberal-NDP government felt this country needed a “cannabis industry table.” Entitled “Engaging the Cannabis Sector,”
“Budget 2022 proposes launching a new cannabis strategy table that will support an ongoing dialogue with businesses and stakeholders in the cannabis sector. This will be led by the Department of Innovation, Science and Economic Development, and will provide an opportunity for the government to hear from industry leaders and identify ways to work together to grow the legal cannabis sector in Canada.”
Is a Cannabis Industry Table Necessary?
If you think “stakeholders” include the cannabis culture in this cannabis industry table, then I have some swampland in Florida to sell you. In the lead-up to legalization, they barely took notice of the legacy market. They continually referred to them as “organized crime.” Sure, some of us had an opportunity to speak with the Legalization Task Farce. But this is akin to allowing children to sit at the grown-ups’ table during holiday dinners.
It is also insulting to the Western legal tradition. We already have laws on the books to run society. And we’ve had them for hundreds of years. Tort law, property law, contract law, commercial law, criminal law. English common law is case-generated law. It evolved from the settlement of actual disputes.
We don’t need parliamentarians constantly creating new laws and regulations. And then empowering expensive bureaucracies to enforce it. In the Western legal tradition, laws were procedural and not preemptively created by politicians.
Who Supports This?
The announcement of a “cannabis industry table” was of course welcomed by industry executives. And by advocates who haven’t learned that “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”
Optimists are certain the cannabis industry table will solve many regulatory problems with legalization. There’s hope that plain packaging and marketing rules will become less strict. And it’s quite possible, the big LPs want to make a profit as much as the little guys.
But skepticism is valid. Especially when George Smitherman, chief executive officer of the Cannabis Council of Canada and a former Ontario health minister, supports the initiative.
Before legalization, Smitherman wanted the government to “zap up the black market.” He said, “[D]o we really want, as a foundation, the entrenchment of the people who have been operating in the shadows?”
Smitherman was against home-growing, even a single plant. He once debated cannabis-activist lawyer Kirk Tousaw on CBC. Tousaw argued that legalization that throws people in cages for growing plants isn’t really legalization. Smitherman called that an “extreme vision.” He said legalization should not be “creating roles” for the legacy market.
If you want some insight into what this “cannabis industry table” is going to be about, look at who supports it.
Will Having A Cannabis Industry Table Actually Work?
Tasking Health Canada with a review of legalization should work out great. They haven’t started yet. Expect completion by the end of 2023, they say. I’ll put my money on the following year.
Whenever they get around to it, we can expect producers of all sizes to want several amendments to the Cannabis Act. Namely, higher potency levels on edibles and beverages, lower “sin” taxes (especially on CBD products), and changing (or at least clarifying) lab testing rules.
But is establishing a cannabis industry table all that necessary? The Ministry of Finance already plans to amend several excise tax regulations without the need for a lengthy roundtable process. They’re not lowering or removing the “sin” taxes. Only changing when producers need to pay them.
No Legalization for Classical Liberals
Budget 2022 also outlines how the government wants to work with Indigenous groups to create a new tax framework for their communities. (And it includes cannabis taxes). And while it’s great to see some progress on the Indigenous front after hundreds of years of dishonesty, it’s also a reminder of what governments are capable of.
The cannabis industry table is going to be inefficient. It will likely accomplish nothing but eating up taxpayer money. Or it’s another attempt to smuggle in an LP cartel. What it won’t be, is a progressive step in the liberalization of Canada’s cannabis industry. We already have a process for that. It’s called free markets and the common law. We just need politicians and regulators to get out of the way.