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Has Canada Lost its Competitive Advantage in the Legal Marijuana Industry?


With declining sales figures and reports of product shortages, the legal marijuana industry that once bristled with potential in Canada now has people wondering where things went wrong.

In fact, if you go back to October of last year – 5 days after legalization was enacted – you can find this piece I wrote discussing the possibility of the U.S, industry falling behind the Canadian one because of federal legalization in Canada and the lack thereof in the U.S.

Now the fear for some is that Canadian companies have lost the advantage their head start afforded them because of the heavy-handedness of various levels of the Canadian government. An expert interviewed by Bloomberg said that branding is almost non-existent in Canada and even if it weren’t, there aren’t many products on the market to tout.

“It’s a real consumer product in big U.S. states where it’s legal, and it isn’t that way yet in Canada despite the fact that we were first,” said Neil Selfe, founder of Infor Financial Group Inc.

One of the main stumbles by Canadian officials can be seen in the CBD market. While CBD products are widely available in the U.S. – including in several major retail chains like Walgreens and CVS all the way down to various and plentiful roadside gas stations – in Canada, CBD is restricted as a medical marijuana product that can only be sold in dispensaries.

And lest anyone think that it’s all sunshine and roses in the U.S., we find states like California doing their best to emulate our neighbors to the north. With rules and regulations comes restricted supply; if supply is restricted too much, it cuts off the oxygen to the market. If the oxygen is cut off for too long, the market is crippled to a point where it can be easily dominated by the more-established black market, as we are seeing in Canada and California.

I know I sound like a broken record on this, and I know that this is a notion that is alien to many of you, but the government has to get out of the way, on all fronts. Lower taxes, less restrictions, less regulation, lower fees – all of the above.

We must get past the idea that marijuana is a dangerous product and that without strict oversight by the government we will all be overrun by the supposed devastating consequences of widespread marijuana use. The industry must be allowed to grow. If it’s not, it may never recover – no matter what country or state we are talking about.