Jun 15, 2023

A Senate committee says the current cannabis market and legislation has kept Indigenous Peoples from sharing in the economic opportunities that the legalization of recreational pot created.

The standing Senate committee on Indigenous Peoples said Thursday that it wants the country to shift its approach to cannabis to help Indigenous communities and entrepreneurs better benefit from the pot market.

A review the committee undertook left members "severely disappointed but not surprised" to hear that Indigenous Peoples found themselves often shut out of or facing additional barriers in the cannabis market.

"Once again, Indigenous Peoples have been excluded from participation in the economic prosperity of the country," said Brian Francis, a P.E.I senator hailing from Lennox Island First Nation, at a press conference in Ottawa.

"And once again, little regard has been given to how our lives have been impacted."

The committee he sat on found the Indigenous community's difficulties in fully taking advantage of cannabis legalization stem from legislation around the sale and distribution of cannabis, licensing and even the regulation and policing of the substance.

Many problems the community faces were identified before legalization happened in October 2018 in consultations that were "inadequate at best" and "could and should have been addressed five years ago," Francis said.

"This oversight, to put it as charitably as I can, cannot readily be corrected," he said.

"The cannabis market is now largely saturated. First Nations entrepreneurs will have to work twice as hard to gain a foothold in this market."

The committee found some First Nations are completely blocked from participating in the cannabis market because the federal government set the scope of the legal sale and distribution of pot, but left regulation of legal activity to provinces and territories.

This meant some First Nations groups had to enter into regulation and sale agreements with provinces and territories 

While agreements have been reached in British Columbia, Ontario and Saskatchewan, Indigenous communities told the committee Quebec and the Northwest Territories have not made similar moves.

Thus, the committee would like the Minister of Health to amend the Cannabis Act to permit First Nations to regulate the possession, sale and distribution of cannabis on their lands. It is also recommending a meeting be held with First Nations, federal, provincial and territorial governments to solve jurisdictional challenges they face.

Legislation has also left few Indigenous communities with the licenses from Health Canada and the Canada Revenue Agency (CRA) that are necessary to operate in the cannabis industry.

As of last September, the committee counted 55 Indigenous-affiliated applicants for commercial cannabis licenses, with 12 of those located in First Nations communities. Some 47 Indigenous-owned or affiliated businesses have received commercial licenses, including six in First Nations communities.

The committee feels this number is small and indicates Indigenous cannabis entrepreneurs may face additional barriers in the licensing process, so it would like the CRA to review the licensing process.

The committee also turned its attention to the excise tax, which is imposed on cannabis products when they're delivered to buyers and shared between the federal, provincial and territorial governments.

For dried and fresh cannabis, plants and seeds, the tax amounts to the higher of $1 per gram or a 10 per cent per gram fee.

For edibles, extracts and topicals, it's a flat rate based on the number of milligrams of total THC in the product. There are additional duties in Alberta, Nunavut, Ontario and Saskatchewan.

First Nations communities do not receive a portion of the tax, but the committee wants the government to look at how they could share in the levy.

Rounding out the recommendations were suggestions around the policing, research and medical insurance related to cannabis, along with the committee urging the government to hear from the Inuit and Métis communities, which it did not reach because of the COVID-19 pandemic.

"There's certainly some work that still has to be done, but I would say this is a golden opportunity for the government to act," said David Arnot, a Saskatchewan senator, at the same conference as Francis.

"We've given them clear recommendations and if they follow those recommendations, that will really set the stage for a reconciliation, certainly, economic reconciliation."