Canadian panel urges bigger role for First Nations in cannabis industry

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Image of an Alderville First Nation signboard advertising cannabis for sale

A signboard advertises cannabis for sale by the Alderville First Nation. Some First Nations are being blocked from participating in the legal cannabis industry, according to a Canadian Senate report. (Photo by Matt Lamers)

A Canadian Senate committee is urging the federal government to revise the county’s adult-use cannabis law to give First Nations the authority to regulate their own production and sales programs.

That is one of the recommendations contained in a recently released report by the Senate Committee on Indigenous Peoples, which spent 2022 examining the implementation of the 2018 Cannabis Act and how the end of prohibition affected Indigenous peoples.

The group of 14 senators heard testimony from 29 witnesses. (MJBizDaily reported on the committee’s hearings last year.)

The panel’s report provides an overview of the challenges First Nations face in the regulation or restriction of cannabis on their reserves.

The report concluded that some First Nations have been blocked from participating in the “legal” cannabis industry.

“The committee heard that this exclusion continues today in fisheries, forestry and the cannabis market,” according to the committee’s report.

“First Nations missed out on significant economic opportunities, which are no longer available now that the cannabis market is largely saturated.”

The report’s 13 recommendations are directed toward Canada’s federal government and a panel that is currently conducting its own review of the federal law.

The Senate committee’s report said First Nations require greater support to regulate or restrict cannabis activities on their lands.

To that end, the committee is urging the Canadian government to ensure adequate funding is available to Indigenous communities for the policing and enforcement of Indigenous bylaws related to cannabis.

The committee also noted that First Nations were not included in Canada’s excise tax-sharing framework.

The federal government has collected billions of dollars in excise payments under that framework from legal cannabis producers and redistributed most of that windfall to provincial and territorial governments, but nothing to First Nations.

“An excise tax-sharing framework for First Nations should be developed to share revenues more broadly,” the report contended.

Warnings ignored

The committee also said the federal government ignored many key problems that were identified before Canada legalized recreational cannabis in 2018.

For instance, in early 2018, two Senate committees reviewing Canada’s proposed marijuana legislation asked for significant changes to the Cannabis Act before it became law.

The same committee that produced the new report had asked the government to delay cannabis legalization in order to address a “lack of meaningful consultation” with First Nations.

The committee also had recommended that Health Canada, which is responsible for federal cannabis licensing, set aside at least 20% of marijuana production licenses for Indigenous communities.

The government ultimately did not accept the recommendation.

An analysis by MJBizDaily on the outcomes of the Cannabis Act and its regulations found that less than 1% of federal licenses were held by businesses in First Nations.

To remediate that, the committee urged the federal government to review marijuana licensing schemes “to increase the numbers of Indigenous businesses to be licensed as cannabis producers.”

Government responds

Questions from MJBizDaily referred to the Office of the Prime Minister were not answered.

MJBizDaily asked Health Canada how it intends to increase the number of federally licensed cannabis businesses on reserves.

The federal regulator said it is committed to supporting the growth of “a diverse and inclusive cannabis industry.”

“As part of this commitment, the department has taken targeted actions to assist interested Indigenous communities with their participation in the cannabis industry, including the establishment of an Indigenous Navigator Service,” a spokesperson said.

The Indigenous Navigator provides assistance to Indigenous-affiliated applicants throughout the licensing application process.

Health Canada’s response to MJBizDaily is available here.

Other recommendations

The Senate committee also recommended that:

  • The government-appointed panel currently reviewing the Cannabis Act engage in meaningful dialogue with Indigenous People and propose solutions to problems raised related to legal jurisdiction, policing, equity and inclusion in the industry as well as mental health and substance abuse.
  • The Minister of Health introduce legislation to amend the Cannabis Act to allow First Nations to regulate the possession, sale and distribution of cannabis on their lands.
  • The Canadian government convene a meeting with First Nations as well as federal, provincial and territorial governments to solve jurisdictional challenges “to enable First Nations to exercise their rightful place in the cannabis marketplace.”
  • The Canadian government establish legislative mechanisms for the enforcement of bylaws and other laws related to cannabis by “all” police services and to ensure that related offences can be investigated and prosecuted effectively.
  • The Canadian government ensure that adequate funding is available to Indigenous communities for the policing and enforcement of bylaws related to cannabis.
  • The Royal Canadian Mounted Police – Canada’s national police force – provide dedicated space for First Nations police services to undertake Drug Recognition Expert Training and that Public Safety Canada provide additional funding to First Nations policing.
  • Government agency Finance Canada work with First Nations to identify options for the development of an excise tax-sharing framework.
  • Finance Canada and Indigenous Services Canada, a government department, work with Indigenous communities to establish a First Nations-led agency to support their participation in the cannabis industry.
  • Health Canada and the Canada Revenue Agency work with Indigenous Peoples and communities to undertake a review of their application processes for all cannabis-related licenses and report the findings by December 2023.
  • Indigenous Services Canada cover the cost of cannabis for medical purposes under the Non-Insured Health Benefits Program.
  • The Canadian government work with cannabis producers to ensure the product is available for medical coverage under Indigenous Services Canada’s Non-Insured Health Benefits.
  • Health Canada and Indigenous Services Canada work with Indigenous communities to establish and fund a research strategy on cannabis and its effects on Indigenous Peoples.
  • Health Canada and Indigenous Services Canada provide funding for the development and update of Indigenous-led public health information on cannabis.

The report is available here.

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.