New Cannabis Council head presses Canada health minister on red tape, exports, excise stamps

New Cannabis Council of Canada head George Smitherman and Canada's federal Health Minister Patty Hajdu met to discuss cannabis policy.

One of the first orders of business for new Cannabis Council of Canada head George Smitherman was a meeting with federal Health Minister Patty Hajdu to discuss issues facing the burgeoning industry.

Packaging restrictions, the export approval process, excise stamps and CBD were among the topics discussed Monday, Smitherman told Marijuana Business Daily.

“On a point-by-point basis, where we can indicate that some improvement would be beneficial to achieving the aims of the legislation, then she was open to that conversation,” he said in an interview.

“We highlighted a few areas where we need their help, and where we are able to offer some help of our own.”

Smitherman, a former Ontario health minister, took the helm of the industry group on Monday.

He previously served as senior vice president of corporate affairs for Toronto-based cannabis firm Biome Grow, as well as Kelowna, British Columbia-based THC BioMed.

The industry group sent a letter to Prime Minister Justin Trudeau in November, requesting a meeting to address some of the industry’s challenges.

Hajdu’s office confirmed the two sides discussed a wide range of cannabis related issues.

On packaging restrictions:

Smitherman and Hajdu discussed Canada’s packaging rules for recreational cannabis.

“One of the risks we see with that is a lot of people are differentiating their cannabis purchase seemingly just on the access of price and THC content,” Smitherman told MJBizDaily.

“We think that’s an area where we can do better to inform consumers in a way that would be beneficial from the standpoint of informing public health.”

On excise tax stamps:

The industry group has proposed a pivot to a national excise stamp, rather than the current system of stamps designated for each province and territory, which the industry group said “has proven to be an expensive resource burden on the cannabis industry.”

“We know the provinces want to make sure that any evolution to this doesn’t risk the proper collection of excise taxes, and they aren’t uniform across the country,” Smitherman said.

“There’s a cost to the red tape,” he said.

On international support:

The sides also talked about support for Canada’s medical cannabis businesses overseas.

In November, the Cannabis Council called on the federal government to create an export blueprint “to realize the potential for Canada’s regulated cannabis products in international markets.”

This week, Smitherman said: “We impressed upon the government that … we think Canada should be rewarded globally as a leader, and our first-mover advantage shouldn’t be (lost).”

On CBD:

They also discussed the regulatory environment around CBD and the prospects of exports.

Canada’s federal health regulator is studying a potential legal pathway to market for a cannabis product, such as one containing CBD, that makes a health claim and could be sold without doctor authorization.

“We spoke about those in terms of achieving the full positive economics benefits that are out there,” Smitherman said.

“We’ve got hemp product in Canada, and markets for it elsewhere, but it’s really difficult to supply those channels for now.”

On export approvals:

It typically takes Canadian medical cannabis businesses four to eight weeks to obtain an export certificate.

“I talked about exports, the desire to create a more expedited export permitting process, and enhancing the prospects of the economic development, and value-added products of Canada being exported,” Smitherman said.

“There’s a real economic opportunity for the country we want to make sure isn’t missed.”

Market crash

Smitherman’s first day on the job coincided with a crushing day in the overall market.

The S&P/TSX Cannabis Index fell 11% Monday amid a broader stock market crash.

It’s been a tough year for cannabis stocks.

The TSX cannabis index has fallen 45% since it was created in January.

Smitherman urges patience.

“At the end of the day, fundamentals will see us forward. We have to try to stick to kneading and knitting and produce results. It’s heart wrenching, very challenging, for so many people,” he said.

“I’m personally taking a long-term view of the sector.

“So far we’ve succeeded on a CA$2 billion annualized basis of transitioning business from the legacy market, and everyone would agree there is quite a bit more out there.”

“The growth in the regulated market has several billion to go. That’s an optimistic sign on a day when there’s not much cause for optimism perhaps.”

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected]

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