With the rapid development of Canada’s legal cannabis markets since 2018, it is surprising how regulation policies, particularly regarding excise stamps, have failed the regulated sector.
For consumers, the stamp on their cannabis package may seem like a minor detail, but for retailers and producers across Canada, it has caused numerous headaches, product delays, and accessibility issues.
Currently, each province and territory has its own unique cannabis excise stamp, which is meant to serve as proof that the appropriate excise duties have been paid in that jurisdiction.
However, these stamps have proven to be more problematic than anticipated. They impede the flow of products, impose significant costs on businesses, and contribute to over-packaging.
In fact, province and territory-specific excise stamps were highlighted as a major issue by senior representatives of some of Canada’s largest licensed producers in a 2019 op-ed. They argued that this labeling requirement hinders a producer’s ability to respond to changing demand and adds unnecessary complexity to product forecasting. Essentially, when a product is misallocated or sold out in one province, retailers are unable to access excess supply from another province.
Multiple excise stamps are a costly and administrative burden for licensed producers who strive to compete with the illicit market. The process of applying separate jurisdictional stamps to various products, such as vapes, edibles, and oils, is time-consuming and inefficient.
The cannabis sector has consistently requested that federal, provincial, and territorial governments implement a single national excise stamp. This would ensure a smoother flow of products and alleviate the administrative burden for businesses.
The precedent for a national stamp already exists in the alcohol industry. Alcohol regulations nationwide do not require region-specific stamps, and they do not face the same labeling delays. Governments recognized long ago that a national stamp was beneficial for the alcohol sector and reduced costs for companies. To support the success of the regulated cannabis sector, governments should treat it equally and apply the same regulatory standards as the alcohol industry.
The Canada Revenue Agency has expressed openness to redesigning the jurisdictional excise stamps. However, a redesign without eliminating the requirement for multiple stamps would only be a partial solution. A single excise stamp would effectively address the burden faced by the regulated sector. The question remains: are governments listening?
