Brendan Kennedy, CEO of Privateer Holdings and President of Tilray, applauded the Canadian government for leading the world by introducing historic legislation to responsibly legalize cannabis in Canada.
"Canada is one step closer to making history by being the first G-7 nation to legalize, regulate and restrict access to cannabis for responsible adult consumption," said Kennedy. "Today's legislation strikes a reasonable balance of protecting public health with creating an accountable industry capable of eliminating the illicit market through competition. We are extremely optimistic about the regulatory framework the government is recommending. As Canada embarks on this historic path, we look forward to helping the government achieve their goal of keeping cannabis out of the hands of youth while eradicating the black market."
"More than $8 billion in illicit cannabis sales flow to gangs and criminal organizations each year. Undercutting the illicit market will be difficult if companies are not able to offer the same products consumers are already buying on the illicit market. It will also be difficult if legal producers cannot undercut illegal producers on price. Unlike the black market, legal producers have to pay taxes and incur expensive regulatory costs," said Kennedy.
He also argued that branding and product diversification is necessary to help consumers make educated choices. "There are thousands of cannabis strains offering different effects with numerous ways to consume and a myriad of agricultural processes used to grow the plant," said Kennedy. "Allowing branding and different product formats – especially non-combustible forms of consumption – is crucial to give consumers the same options they have on the illegal market.
The legislation provides authority to the government to bring forward regulations with regard to packaging and branding, including size of the label, colouring, logos and what parameters will be used to determine if it appeals to youth. In response, Kennedy said, "Professional companies must be allowed to explain to consumers why our products are superior to those offered by their illegal competitors. To that end, we look forward to working with the government to ensure that branding allowances properly balance informing consumers while not appealing to those under the age of 18."
Kennedy further explained that unfairly restricting product formats and branding - especially in a nascent market -- would give an unfair advantage to black market operators and other, less scrupulous producers able to offer low-quality products at low prices. It would also have the effect of unduly punishing small or craft producers – sectors of the cannabis industry the government has stated it aims to help get started.
"Restricting branding and product formats will crush small growers because they will not be able to differentiate themselves and well-capitalized corporations will be able to undercut them on price," said Kennedy. "It will create a race to the bottom where people have more money to buy low quality cannabis because price will be the only differentiator between products. That is the opposite of what public health officials are trying to achieve by recommending limits on branding."
Tilray is a global leader in medical cannabis research and production dedicated to advancing the science, efficacy and safety of cannabinoid medicine for patients with a diverse range of conditions. The company operates one of the largest and most sophisticated federally licensed medical cannabis cultivation facilities in the world, offering a range of products to patients, pharmacies and researchers in Canada, Australia, the European Union and the Americas.
Privateer Holdings is the world's first private equity firm to invest exclusively in legal cannabis. The company has raised more than $130 million to invest in the emerging legal cannabis industry worldwide.