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Struggling Profits for Cannabis Companies Highlighted in Cannabis Act Review, Supported by Health Experts

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Review of Cannabis Act Reveals Struggles for Companies and Support from Health Experts

A recent review of the federal legislation that legalized the recreational use and sale of cannabis in Canada highlights the challenges faced by companies in the legal market. These companies report difficulties in achieving profitability and maintaining financial viability. Retailers specifically cite taxes, markups, fees, and regulatory compliance costs as barriers to the industry's success. They argue that a viable legal market is crucial for ensuring a safe and legal supply of cannabis and combating the illicit market. The review also emphasizes the support of health experts for the legislation's precautionary approach. This includes measures such as THC limits for edible cannabis products and restrictions on promotion. Some experts suggest considering stricter age limits for possession, distribution, and purchase of cannabis. While progress has been made in deterring criminal activity and displacing the illicit market, concerns remain about unauthorized retail stores and illegal online channels. The review panel received mixed opinions on whether consumer demand is being met. Consumers still seek products, such as higher-potency edibles, that are not readily available in the legal market. Additionally, limited access in rural and remote regions poses challenges for consumers in those areas. Overall, the review highlights the ongoing struggles faced by companies in the legal cannabis market and the importance of addressing barriers to profitability. It also underscores the need to balance public health concerns and consumer demand in order to create a successful and sustainable cannabis industry.

Impact of Cannabis Act Review on New Businesses

The recent review of Canada's Cannabis Act reveals significant challenges that could impact new businesses entering the legal cannabis market. The struggle to achieve profitability and maintain financial viability, due to factors such as taxes, markups, fees, and regulatory compliance costs, could deter new entrants.

Barriers to Market Entry

The review highlights the importance of a viable legal market in ensuring a safe and legal supply of cannabis and combating the illicit market. However, the barriers identified could pose significant hurdles for new businesses, potentially limiting market growth and competition.

Public Health Considerations

The review also underscores the importance of balancing business interests with public health concerns. The support of health experts for the legislation's precautionary approach, including THC limits for edible cannabis products and restrictions on promotion, could influence the types of products new businesses can offer and how they market them.
Meeting Consumer Demand
The mixed opinions on whether consumer demand is being met present both challenges and opportunities for new businesses. While consumers seek products not readily available in the legal market, such as higher-potency edibles, new businesses that can meet these demands could gain a competitive edge. In conclusion, while the review highlights significant challenges, it also provides valuable insights for new businesses looking to enter the legal cannabis market.
Story First Published at: https://financialpost.com/pmn/business-pmn/cannabis-act-review-finds-companies-struggling-to-profit-health-experts-supportive
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