The Impact Canadian Cannabis Legalization has on Indigenous Communities
Long before weed became recreationally legalized in Canada, and we’re talking thousands of years back, cannabis was used by Indigenous tribes. Through academic studies and archaeological discovery, researchers have found proof of cannabis and hemp use long before European explorers and settlers came to North America with records showing that cannabis and hemp were used for clothing, hunting, gathering. First Nations and Indigenous have always used herbs and plants as medicine, so it’s not a surprise that cannabis is also used as a form of plant medicine. While the legalization of cannabis in Canada has presented many economic opportunities for Indigenous communities, the road has been a bumpy one.
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Indigenous Regulations vs. the Legal Cannabis Framework
1) The issue of cannabis taxation is still muddy
While the government has spoken of a nation-to-nation approach, the Cannabis Act was created without consulting the needs and aspirations of Indigenous communities. Taxation is a hot and complex issue. Excise taxes are required on specific goods and services specifically alcoholic beverages, tobacco, and cannabis products. Through the Indian Act, Indigenous people are exempt from paying tax; however because the excise tax is applied at point of packaging and not at point of sale, First Nation cannabis producers and retailers have to comply. When it comes to tax revenue from cannabis sales, cannabis taxes are also treated differently and are shared between the federal and provincial governments. So now the question becomes how will these taxes be paid and shared with First Nations people across Canada?
2) Disruption to the way of life and businesses on reserves
Another challenge Indigenous communities face with legalization is participation in the legal Health Canada framework. Before federal legalization, cannabis could be bought from many First Nation reserves in Ontario. These shops were completely legal and were supported by the Chief and community. With the legalization of weed came a growing push to set laws around the sale of cannabis, laws that put First Nations at a disadvantage. For some communities, existing dispensaries played a role in sponsoring community events, teams, and giving back to the community. However, the Cannabis Act prohibits cannabis producers, retailers, brands from sponsoring a person, entity, event, activity or facility.
The growth of cannabis retailers across the country also means less business on the reserves, because why drive out to a reserve for your cannabis needs when you can conveniently buy it from the shop down the street?
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3) Challenges with owning a Health Canada cannabis store
As of September 2020, only 4% of cannabis licenses granted by Health Canada are Indigenous-affiliated. Low participation is said to be a result of higher barriers to entry that Indigenous communities face compared to the rest of the Canadian population. Existing systemic barriers have made it very difficult for Indigenous communities to start a business, including challenges in securing loans, business partnerships, and other investments that could help expand their working capital.
Cannabis has been an economic driver in many communities
While there have been challenges, the cannabis industry has also been an economic driver for many First Nation communities. Many First Nations communities struggle to afford basic necessities like clean drinking water and adequate health care; being able to tap into Canada’s multibillion dollar cannabis industry is regarded as a potential avenue for economic self-sufficiency.
Seven Leaf is Canada’s first indigenous-owned and operated medical cannabis facility located on traditional Kahniakehaka (Mohawk) territory. Currently they employ over 75+ locals, and are able to offer steady employment for a variety of positions and work that have attracted many youth, high school, and college graduates who are interested in learning more about pot, production, harvesting and growth. Nations, located in British Columbia, is another First Nations controlled medical and recreational cannabis production facility. Profits are being reinvested back into helping Indigenous Peoples with a focus on education, employment, business and health.
There has been a call for greater jurisdiction and sovereignty by First Nations people around the cannabis produced and sold on reserves. Many believe in the importance for chiefs and councils to pass their own cannabis laws in their territories. Rob Stevenson, owner of Medicine Wheel Natural Healing, believes there is room for Indigenous retailers to carve out their own cannabis market, distinct from what’s currently offered at provincially regulated dispensaries. For Indigenous communities to tap into the legal framework, there is an opportunity to harmonize efforts and regulations so both systems and co-exist. Federal cannabis laws will come up for a 3-year review this year, which will give First Nations an opportunity to make a new deal with the Canadian government
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