The Quiet Collapse: What’s Happening to Canada’s Cannabis Producers and Why it Should Matter to You
There’s a story unfolding in Canadian cannabis that doesn’t make the news, because it doesn’t come with a scandal or a flashy headline. It comes in the form of court filings, licence threats, and good people quietly walking away. As an independent retailer in Toronto, I’m watching it closely because what happens upstream eventually reaches our shelves, and yours.
The numbers don't lie
When cannabis was legalized in 2018, the federal excise tax was built around a wholesale price of roughly $10 a gram. The rule: producers pay the greater of $1 per gram or 10% of the selling price which was considered reasonable enough at the time.
But wholesale prices have collapsed to around $3 a gram in todays market while that $1 floor never moved. So today, the excise tax, which eats between 24% and 31% of a producer’s gross revenue, is up from about 11% in 2019. Let that sink in: before a producer pays for staff, packaging, rent, or electricity, nearly a third of every dollar is already gone to Ottawa.
The result is exactly what you’d expect. Only about 14% of licensed producers actually turn a profit. In 2026 alone, we’ve watched a wave of insolvency filings – CanadaBis, THC Biomed, and the Simply Solventless group, among others – major operators seeking creditor protection while owing millions in excise arrears. The Canada Revenue Agency has started using licence renewals as leverage: pay your back taxes, or we pull your licence and your entire inventory becomes worthless overnight.
And now in June 2026, the Cannabis Council of Canada, the industry’s main advocacy body, suspended operations. After four years of asking for reform, nothing really changed. So they stopped asking.
The part that should concern you
This isn’t just a producer problem. It’s a chain reaction.
Fewer producers means less competition, less innovation, and fewer unique products making it to legal shelves. The talented growers, the ones who actually care about the plant and the craft, are increasingly looking elsewhere: genetics, international markets, anywhere but the Canadian legal system that’s squeezing them dry. When the people who do it best decide it’s not worth the fight, the whole market gets blander, more corporate, and more expensive.
Look at it from both sides for a moment. Maybe this is just policy that hasn’t caught up to reality, a framework written for a market that no longer exists, left to rot through bureaucratic inertia. Or maybe it’s working exactly as designed: tax revenue collected, the “we legalized it” box checked, and a slow squeeze that conveniently clears out the small independents and leaves behind a handful of large players who are easy to regulate and easier to tax.
I’ll let you decide which read feels closer to the truth but either way, the outcome is the same: the independent gets squeezed from both ends.
Why Minerva is telling you this
We’re a boutique, independent shop and its a path we chose on purpose. It means we live and die by the health of the whole ecosystem: the growers, the craft producers, the people who make this industry worth being part of. When they hurt, we all do.
We’ve fought overreach before, standing up for our neighbourhood against the city’s plans in 2025, and we’ll do it again because this is the same fight, just further up the supply chain. An industry that punishes its best people isn’t a healthy one, and pretending otherwise helps no one.
So next time you’re in the shop and you find something local, independent, and genuinely good, know that it survived a system actively working against it. That’s worth supporting and it’s worth talking about.
And we’ll keep talking about it.
If you care about this industry, make some noise
Talking isn’t enough anymore. The people who can actually fix the excise framework are politicians and bureaucrats, and they only move when there’s pressure. The Cannabis Council just folded which means the formal lobbying lane is gone, and it’s on the rest of us now. Producers, retailers, budtenders, and customers: every voice counts, and the window is now, while the 2026 federal budget process is live.
Here’s where to direct this call to action:
The Minister of Finance oversees the Excise Act and the duty framework. This is the office that can change the $1/gram floor. Contact details: fin.gc.ca.
Your local Member of Parliament. Find yours at ourcommons.ca/members and write to them directly with a constituent letter about this failing local industry.
The Standing Committee on Finance (FINA), which reviews budget submissions and hears from the public: ourcommons.ca/Committees/en/FINA.
Keep it simple and keep it firm: the excise tax was designed for a $10 gram in a $3 market, it’s pushing the people who built this industry into bankruptcy, and the fix; moving to a flat 10% duty and scrapping the $1 floor, is sitting right there.