Legalizing marijuana was supposed to kill the illegal market but it hasn’t. The reason is too much taxation, regulation and micro-management.
Legalizing cannabis was supposed to spark a revolution — a bold new era of progress, opportunity and transformation. Instead, it began a complicated journey marked by significant achievements but also frustrating setbacks. Canada’s legalization has shifted both the culture and the industry, paving the way for innovative products, strict quality standards and a burgeoning community of consumers. But several remaining hurdles make it hard for the legal industry to realize its full potential and, as legalization was supposed to do, eliminate the illegal cannabis industry.
High excise duties, restrictive limits on edibles, curbs on consumer education, strict rules on packaging and labelling, limited opportunities to build brands that would support conversion from the illegal market, complex provincial distribution systems, high compliance costs and cumbersome excise stamp requirements that add to complexity and costs have prevented legal businesses from succeeding. As a result, the unregulated market remains a formidable competitor, still accounting for around 30 per cent of sales, according to a 2023 Stats Can survey.
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