Happy 5th Cannabis Anniversary, Canada. 5 Myths Exploded
“The first casualty when war comes is truth.” Hiram Johnson
Canadian cannabis is not a war zone, but its conventional wisdom is beginning to fray. I will challenge 5 myths that arose early on and persist to this day.
Myth 1: Cannabis is fully available
> Reality
Kind of but legality doesn’t mean you have equal and widespread access of all products. Federal & provincial ‘nanny state’ regulations keep us from basic things consumption lounges and higher THC edibles. Government wholesalers take an unsophisticated, biased approach to listing products. Don’t get me started on the high cost and access challenges of medical cannabis. No wonder the illicit market remains large at approx. 30-40% of total consumption.
Myth 2: Founders & early investors got rich
> Reality
This claim plays well to populists but is overblown and distracting. I’ve been in the legal sector since 2017; most executives I know didn’t make gobs of money let alone cash in when they had paper wealth. Remember that LP market caps peaked 4.5 years ago on April 1, 2019 Unless you received lots of penny stock and got out early (many did but most couldn’t), you are now sitting on big losses/missed gains with little hope of ever seeing a return.
Myth 3: The industry is unprofitable
> Reality
This sound bite is generally true but becoming outdated. I have consulted to privately held firms that are making (modest amounts of) money. Some public companies like Avant Brands are also generating profits. Without a doubt, the industry is hurting. Many businesses will fail. Yet, in these ashes success stories are quietly emerging.
Myth 4: Stigma is a non-issue
> Reality
Nope. While public acceptance has grown, we still see major political resistance (see retail deserts). Cannabis stigma is also common in groups like banking & insurance services and investors not to mention among talent reluctant to enter the sector
Myth 5: Regulatory relief is coming
> Reality
Final recommendations from the flawed Expert Review of the Cannabis Act are due to Parliament in March 2024. When tabled, there is no guarantee that key reforms in areas like taxation will be included. There are also no assurances that any reforms will be implemented due to competing government priorities (there are many), a possible federal election or bureaucratic inertia.
5 years into legalization, it’s time to take off our typically Canadian rose-coloured glasses and see the sector for what it is. Cannabis deserves immediate regulatory and taxation relief not to mention more respect and acknowledgement of its corporate successes.
#canada #LPs #anniversary #5years #regulations