Beena Goldenberg: Cannabis legalization was bold. So where’s the economic plan?

What other country would hesitate to fully capitalize on a thriving homegrown sector that can drive investment in plants, patents, and technology, fueling good jobs and prosperity, while competitor countries race ahead? Canadians should be asking this after reading the Canadian Chamber of Commerce’s Business Data Lab’s analysis of the economic impact of the legal cannabis sector, commissioned by Organigram Global, Canada’s largest cannabis company by market share. Since legalization, Canada has been a global leader in cannabis regulation, production, and research. In 2024, the sector generated $29 billion in total economic output and contributed $16 billion to national GDP, including both direct and indirect impacts, while supporting more than 227,000 jobs in communities across the country. This includes 168,000 direct jobs in cultivation and retail, alongside 30,000 indirect and 29,000 induced positions in logistics, supply, and services.1Source: High Impact, Green Growth: The Economic Footprint of Canada’s Cannabis Industry. Prepared by the Business Data Lab (BDL) at the Canadian Chamber of Commerce, July 2025. Since legalization, the industry has contributed more than $76.5 billion to Canada’s GDP.2Deloitte. (2025, August). Six years of legalization: The economic and social impact of Canada’s cannabis sector. Ontario Cannabis Store For context, forestry and logging contribute $3.3 billion annually in direct GDP, breweries $2.6 billion, aquaculture $2.0 billion,3Canadian Aquaculture Industry Alliance. Industry by the Numbers. Retrieved from https://aquaculture.ca/industry-by-the-numbers and wineries and distilleries $975 million.4Statistics Canada. Table 36-10-0434-06: Gross domestic product (GDP) at basic prices, by industry, monthly, growth rates (x 1,000,000). Retrieved from https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610043406 Despite these impacts, the sector is still treated as an afterthought in economic policy, with governments hesitant to give it the same support as AI, biotech, batteries, or other key industries. If Canada wants a resilient 21st-century economy that creates good jobs from coast to coast, legal cannabis should be recognized as a generator of investment and exportable intellectual property with massive growth potential. We have first-mover advantage, a rare opportunity that should not be squandered. As an example, Organigram operates facilities in four provinces and employs over 1,300 people nationwide. It is the fourth-largest private sector employer in New Brunswick, with its Moncton flagship facility alone employing over 730 people and representing nearly half a billion dollars in capital spending. This scale shows how key investments can anchor jobs and drive regional growth—potential that, multiplied nationwide, should be a policy priority. Since legalization in 2018, the market has changed dramatically. However, early policy decisions continue to hold it back. Taxes and excise rules are a prime example. Designed with $10-per-gram pricing in mind, the framework no longer reflects today’s $3-per-gram market. Some producers lose up to 35 percent of gross sales to excise, while the illicit market still holds at least 30 percent share. Cannabis flower is taxed at over 12 times the rate of wine, six times beer, and twice spirits, creating an uneven playing field and deterring capital inflow to the cannabis sector. A flat 10 percent rate would better reflect current conditions and support innovation, advanced manufacturing, and skilled employment. The current rules also force producers to navigate province-specific excise stamps, creating regulatory friction that hampers interprovincial trade, squeezes margins, and diverts capital from facilities, technology, and product development. The sector also lacks the coordinated support that other key industries receive. For AI or clean tech, governments align R&D funding, tax incentives, and export assistance. For cannabis, these measures are largely nonexistent. Many companies have scaled back R&D because the high taxation rate stifles the ability to generate adequate profits while keeping pricing at a level that’s attractive to consumers versus the illicit market. When R&D stops, we lose the chance to build higher value, differentiated products, and grow the intellectual property that drives exports and keeps sales away from the illicit market. If the goal is to keep jobs and investment in Canada and turn our first-mover advantage into lasting economic opportunity, three practical reforms make sense: Modernize excise rules. The current framework was designed for a $10-per-gram market and no longer reflects today’s prices or competitive landscape. A shift to a value-based tax, a single national digital excise stamp, and aligning excise remittance with provincial distributors—as is done with alcohol—would reduce administrative costs and make legal supply chains more competitive against the illicit market. Recognize cannabis as a key agricultural sector. Legalization was historic, but economic policy never followed. While the sector has added billions to GDP, growth has been constrained by policy inertia: companies have retrenched, innovation has slowed, the illicit market remains large, and a number of firms have entered CCAA proceedings in recent years,5StratCann. (2024, December 29). Creditor protection, bankruptcies, and acquisitions in 2024. Retrieved from https://stratcann.com/news/creditor-protection-bankruptcies-acquisitions-2024/ reflecting broader financial pressures in the sector.6MJBizDaily. (2023, December 18). Canadian cannabis insolvencies persist in 2023 amid industry woes. https://mjbizdaily.com/canadian-cannabis-insolvencies-persist-in-2023/ Cannabis has been left in regulatory purgatory at Health Canada instead of being nurtured as a key agricultural and consumer industry. With a national focus on industrial policy and building “One Canadian Economy,” it’s time to reset. Cannabis belongs in an economic-facing ministry where it can be integrated into broader agri-food strategies on innovation, sustainability, and exports. The sector includes not only recreational products like pre-rolls and vapes but also beverages, edibles, medical cannabis, and CBD wellness products. British Columbia’s July decision to shift cannabis to the Ministry of Agriculture is still in its early days, but it’s a promising example of government recognizing the sector’s economic potential, one Ottawa should emulate. Build a national export and R&D strategy. Canada’s regulatory experience and production capacity give us a global edge—across both medical and adult-use cannabis—where quality standards always matter. A coordinated export strategy, supported by targeted R&D incentives and public-private partnerships, would help Canadian firms develop differentiated products, retain IP and manufacturing jobs, and reduce trade friction through mechanisms like mutual recognition of quality standards and streamlined import/export procedures. There’s also a regional dimension. Investment in production and processing facilities creates good jobs beyond major urban centres, spreading prosperity more widely. Public health protections must remain strong, but they shouldn’t be used as an excuse to avoid economic policy. Health regulation and economic strategy are distinct, and both are needed. Other industries with complicated pasts, like alcohol or mining, were normalized and supported once their economic value became clear. The same should apply here: maintain health and safety rules while designing taxes and regulations that don’t hinder competitiveness and growth. Treating cannabis in this way isn’t about picking winners. It’s about recognizing where real economic activity already exists and adjusting policy so private investment can deliver more value for Canadians. Good policy corrects market failures, like underinvestment in R&D or regulatory barriers that prevent scaling, instead of piling on costs that push activity back into the illicit market. Canada led the world in building a legal cannabis market. Now we need the next step: smarter tax rules, coordinated government support, and a national plan that channels both public and private capital into productive investments—plants, patents, and technology—that generate high-quality jobs and sustainable prosperity. Done right, cannabis can become a pillar of Canada’s economic strength.