Canada became the first G7 nation to legalize recreational cannabis in November of 2018. While the country is one of the largest exporters of legal cannabis, Canada does not allow cannabis imports from other countries.
This has caused an uproar from countries such as Jamaica, Australia, and Colombia that would love to profit from the medicinal cannabis market in Canada. These countries are calling on Canadian trade officials to remove non-tariff barriers blocking commercial imports of medical cannabis to the country.
In October this year, Colombia voiced its frustration at a WTO committee meeting on market access.
Even Canadian businesses that produce overseas are not able to sell their cannabis products in the Canadian cannabis market. Once the raw materials leave Canadian soil for production elsewhere, they cannot find their way back in.
An example is Toronto-headquartered cannabis producer Avicanna. Speaking to MJBiz Daily via email, this is what the CEO of Aviacanna Aras Azzadian had to say about the situation:
“We are a Canadian company with all our R&D and clinical infrastructure in Canada, where our products are developed. And while we cultivate our cannabinoids and manufacture some of our finished products in Colombia, the only market we cannot export them to is our own country.”
Such businesses have joined their foreign counterparts in lobbying the Canadian government to allow foreign competition in the medical marijuana market.
The Canadian Chamber of Commerce’s cannabis working group supports the push to allow for cannabis imports from other countries. However, the group proposes a model with some limitations.
According to some industry sources, Health Canada is responsible for the status quo. This paints Canada in a bad light in view of international trade agreements, considering that Canada is a world leader in cannabis exports.
No Economic Benefits Attached to Importing Cannabis
The Canadian cannabis market is both heavily regulated and heavily taxed. This has made it very difficult for Canada-based cannabis producers to break even. A recent report that was published on Market Watch indicated that a majority of Canadian pot businesses were yet to become profitable, three years post cannabis legalization. Consequently, some industry stakeholders are anxious about allowing foreign competition at this point, before things are streamlined. This will only allow complexities to the already challenging regulatory system.
Speaking to MJBiZDaily, the former CEO of Ontario-based Canopy Growth expressed his displeasure in the push to legalize cannabis imports. “There’s no economic benefit on the whole of importing,” he said. “I think they are going to not (allow imports), and they shouldn’t, because you’re exporting jobs. From a bigger economic perspective, the jobs have landed where they were most desperately needed,” He added.
At the moment, Canada has the largest regulated medical cannabis export market. However, the country does not allow cannabis imports. Cannabis imports are only allowed in certain situations:
- When new license holders are importing cannabis seeds and plants to supply the medical market.
- When a company is importing cannabinoid-based prescription drugs that are subject to premarket authorization.
- When cannabis is being imported for scientific research
In the last three years since Cannabis was legalized in Canada, Canada has exported about 30,000 kilograms of medical cannabis in dried form. In the same period, it has also exported about 35,500 liters of cannabis oil to overseas markets. If Canada opens its borders for cannabis imports we expect to see similar or higher figures in terms of cannabis imports to the Great White North.