The Rotation: Vol. 11
Strike at Quebec Cannabis Stores, Canopy Dissolves ESG Unit and Call for Action on Excise Tax Policy
Strike Called at SQDC in Quebec
A general strike has been called by the union representing workers at the Société québécoise du cannabis (SQDC), reports StratCann.
- Approximately 300 employees went on strike after the SQDC suspended 75 employees and the president and VP of the Canadian Union of Public Employees (CUPE) for violating the SQDC dress code.
- Refusal to wear the dress code was an attempt to put pressure on the SQCD to meet the demands of CUPE members for better salaries and benefits.
- According to a CUPE press release, SQDC members make around $17 an hour starting wage, with the majority of employees having no full-time position or job security.
- According to the SQDC, the strike is affecting 22 out of the 89 SQDC locations in the province.
Whether you support unions or not, most people agree that budtenders and retail associates are undervalued in the cannabis industry. Although the timing of the strike may not be ideal due to the immense pressure already being placed on the supply chain and the fear that this could potentially exacerbate it, Quebec has been a type of proving ground for organized labour more than any other province potentially.
Social and Advocacy Team Dissolved at Canopy Growth
Canopy Growth’s latest round of cost cutting layoffs includes ESG unit reports MJBizDaily.
- ESG programs establish – and assess progress toward – corporate social, environmental and governance goals and is similar to the concept of Corporate Social Responsibility
- According to Canopy, the department’s ESG work will be continued by its Diversity, Equity and Inclusion (DEI), investor relations and communications teams.
- Canopy published its first ESG report in January, which was well received by the industry for being one of only a handful of companies to do so.
- The report disclosed information such as the company’s greenhouse gas emissions and energy consumption as well as charitable and social impact donations and workforce gender-parity statistics and is considered one of the most comprehensive ESG reports to be published to date.
It is unfortunate to see that the recent layoffs at Canopy have also impacted its ESG unit. When Canopy released its first ESG report, it came as a slight surprise from the industry and was rightfully praised for being a progressive initiative and helping push issues around sustainability and ethics forward. Although it remains to be seen whether this initiative will continue at Canopy through other departments as they stated, we certainly hope that ESG becomes a more prominent consideration across the cannabis industry. If you are interested in learning more about ESG and Corporate Social Responsibility, we just released a new episode of High Fidelity featuring Mika Unterman that you can check out here.
Renewed Call to Action on Excise Tax Policy Reform in Canada
- The report emphasized that the current Canadian Excise Duty structure systemically inhibits craft cultivators from generating survivable income.
- The report argues that if the average legal and illicit market prices per gram remains <$5/g duty paid landed (wholesale), small scale craft producers will have unsustainable margins regardless of revenue growth.
- Canada’s cannabis excise duties are paid by the producer, who must remit the higher of a flat-rate duty ($1/g) or an ad-valorem duty based on their sale price (10% of any wholesale price above $10/g).
- Widespread price compression across the cannabis industry has resulted in effective excise duty rates of 20%-35% on craft cannabis flower, which fundamentally threatens the viability of many craft producers.
We highly encourage everyone to read and share this important report. We commend this organized effort to call on government officials to address this critical issue. Since the Stand for Craft campaign stated, we have heard from stakeholders across the industry the severe impact that the excise tax is having on small to medium size producers and we hope to finally see action being taken to solve this problem.