6 Years After Canadian Legalization, the World is (finally) Opening its Doors to Cannabis

By: Rick Savone

With the legalization of recreational cannabis in 2018, Canada became the first G7 nation to fully legalize cannabis for both medicinal and recreational use. This groundbreaking move positioned Canada as a trailblazer in the global cannabis industry, with Canadian companies like Aurora quickly becoming leaders in the international medical cannabis market. Today, Canada stands at a critical juncture — there is a unique window of opportunity to solidify and expand our leadership in the rapidly evolving global medical cannabis landscape.?

Seizing the Global Opportunity?

The global medical cannabis market is projected to grow exponentially, driven by increasing legalization and rising public acceptance, and amplified by an increase in clinical research supporting cannabis for a wide range of therapeutic uses. According to some estimates, the global medical cannabis market could exceed $70 billion by 2032. This presents a tremendous opportunity for Canada to capitalize on its first-mover advantage. No country’s cannabis producer group is better suited than our own for supplying quality medical cannabis products in a federally regulated environment.?

This window of opportunity will not remain open indefinitely, however. As more countries move toward liberalizing their cannabis regulations, including Germany, Poland and Israel, the competitive landscape is evolving quickly. Moreover, emerging markets in Latin America, Africa, and Asia are exploring cannabis cultivation and export, with the potential for disrupting global supply chains that are currently occupied mainly by Canadian producers.?

Overshadowing all of this are the recent developments in the United States where Americans look poised to reclassify cannabis, moving from the dark into the light. Re-scheduling cannabis recognizes its medical benefit and reverses many decades of drug policy in the United States where cannabis was treated the same as heroin. Equally as significant is that both presidential candidates for the November election have taken significant, forward-looking cannabis policy stances, from reclassification (former President Donald Trump) to full legalization (Vice President Kamala Harris).?

With their notable shift in US cannabis politics, it’s only a matter of time before the thinking by multilateral institutions, including the International Narcotics Control Board, is impacted. Canada likes to play the middle ground in these communities, but there is no denying that changes in the US will dramatically shape the future of the international framework through its policies, diplomacy, and enforcement efforts. And while US cannabis companies are currently prohibited from entering international markets, they will soon be looking to expand far beyond their own borders. These companies bring their own expertise, scale, and unique market dynamics, which will offer new challenges to Canada’s market position.?

While Canadian producers, and Aurora in particular, are currently in a strong position, the window for cementing that leadership is narrowing and proactive measures must be taken now to capitalize on the opportunities presented by global medical cannabis growth. That’s why Aurora’s Global Government Relations team continues to advocate about the following issues:?

1. Fixing the Domestic Tax/Duty and Fee Structure: Canada’s current excise duty and fee structure is the single largest burden that Licensed Producers face and threatens the industry’s viability and competitiveness. While challenges with the current excise duty regime are well publicized, less known is that Health Canada applies its 2.3% Annual Regulatory Fee on export products. This is essentially a tax on our exports and challenges our ability to compete against foreign producers. Health Canada should stop applying the ARF to medical cannabis exports, especially since exporters are also paying fees to importing countries for essentially the same purposes.?

1. Leadership in International Regulatory Frameworks: Canada must work closely with international regulatory bodies to create standardized frameworks for cannabis trade, ensuring that Canadian products can meet the compliance needs of global markets. While Aurora already excels in highly regulated foreign markets, there is an opportunity for Canada to support rules-setting as more international markets open. We shouldn’t be satisfied to be observers in multilateral environments while others seize the opportunity to assert their own leadership. Streamlining export procedures and removing trade barriers will allow Canadian companies to penetrate new markets more efficiently, and reach international patients more effectively.?

1. Enhancing Trade Commissioner Services - Embassy and Trade Commissioner Service support for Canadian exports has been a game changer for Canadian industry. But the TCS has their hands tied when it comes to medical cannabis at precisely the moment that foreign governments seek to learn about effective Canadian methods, technologies and competitiveness. Global Affairs Canada sometimes refuses advocacy services for the cannabis sector just as we are about to solidify our international standing. As a result, foreign governments are limited in their understanding of the benefits that Canadians can offer to patients. No other pharmaceutical product or medical industry is limited in this way. Aurora urges the Government of Canada to unleash the economic development potential of our medical cannabis industry.?

Canada’s leadership in the global medical cannabis industry is both a reflection of its early adoption, led by patients, and a result of the robust regulatory and entrepreneurial framework that developed as a result. However, the landscape is shifting quickly, and other countries are moving aggressively to capitalize on the opportunities presented by the burgeoning market. By taking a leadership position on the global stage while supporting producers at home, Canada can seize this moment and remain a dominant force in the global medical cannabis industry for years to come.?

#10.17

#CannabisLegalization

#CannabisIndustry

?