The outbreak of the COVID-19 pandemic has led to the government having to make some tough decisions. They have had to classify all businesses nationally as essential and non-essential due to social distancing measures to help reduce the spread of the virus. Amongst this new set of classifications comes the medical cannabis production industry.

Canada has been a leader in the global cannabis market on both fronts; medicinal and commercial. Dating back to the early 2000s, when it first legalized the use of cannabis for medicinal purposes, Canada has been a ground breaker in the legalization of marijuana (https://www.leafly.ca/news/canada/history-cannabis-canada). The cannabis market in 2019 alone reached $7.2 billion in the country. With this significant contribution and projected growth over the coming years, the Canadian cannabis industry shows signs of great potential and importance to the nation’s GDP (https://www.prnewswire.com/news-releases/canada-cannabis-markets-report-2019-canada-is-fast-becoming-the-worlds-leading-market-with-revenues-expected-to-reach-7-2-billion-300815795.html).

Coming off such significant sales and production in the past year, the federal government has deemed the medicinal cannabis production as an ‘essential’ business amid the COVID 19 pandemic. Though this classification comes as a recommendation that is nonbinding and at each province’s discretion, it is required as all cannabis production, commercial and medicinal, is regulated by the federal government.

In the current situation Health Canada continues to study and monitor the challenges that these producers are currently facing. Cohesively, the country has 370,000 active medical cannabis registrations as well as another 30,000 personal or designated production registrations. Under this essential classification, most provinces are allowing cannabis businesses to remain functional and operational.

This classification as an ‘essential’ business came after multiple patient groups lobbied the federal government by signing petitions which had up to 2600 signatures. Cannabis Council of Canada CEO George Smitherman responded by agreeing and understand how critical medical cannabis is to national health care. He added that though this is an established service and industry, it remains a Startup sector and is equally vulnerable to disruptions during the COVID-19 pandemic.

He later stressed that this industry too, like other vulnerable sectors, should have equal access and support provided from government backed services. Canadians for Fair Access to Medical Marijuana VP Max Monahan-Ellison added that he is “thrilled to see the government take this step to ensure patient access to medical cannabis is maintained” signalling that their next focus will be to work towards the increased affordability challenges that the patients face.

The cannabis industry, like other tech and start-ups, requires assistance and support to be able to survive and thrive past this pandemic. It is essential for the government to help foster growth in these vulnerable sectors during this time. The government has been working diligently to release additional funding in installments for businesses as their needs are identified. Amongst wage subsidy programs such as CEWS, 10% Temporary Wage Subsidy, CEBA etc. there are some new programs to also support the innovation and start up sector such as the specialized COVID-19 IRAP program with calls to the government to create more.

It is innovation and creativity that led to the discovery of the medicinal use of cannabis. The same innovations over time have proved to make revolutionary medical discoveries to improve the lives of many, proving that R&D funding is the way forward. The Government of Canada, understanding how essential innovation is to evolution and technological advancements, facilitates research and development through its federal programs such as the Scientific Research and Experimental Development (SR&ED) program. This offers tax credits and occasionally refunds to all businesses within the country that participate in SR&ED eligible research. SR&ED eligibility is dependent on the nature of the projects involved. Claimants are permitted to file for tax credits for all expenses incurred during the project which in return contribute to Canada’s innovative pool.

EVAMAX works diligently to provide businesses the innovation and research and development funding they need through government provided services. Contact EVAMAX today for a no-obligation consultation to see if your projects qualify for funding.

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