Good morning, Mr. Chair. Thank you for allowing us to voice our concerns today from the industry.

Despite the federal finance committee's recommendation to support the cannabis sector, no action has been taken by the government. It raises a question as to whether the government plans to provide relief for the industry they legalized and set in motion.

Approximately 40% of all bankruptcies in Canada over the past three years were of cannabis companies, highlighting the issues plunging the industry. This collapse underscored the urgent need for federal intervention and support in the industry.

Cannabis companies face a crippling tax burden of over 45% of their revenues, far beyond what is seen in other regulated industries such as alcohol and tobacco. This has led to unviable profit margins, with many businesses unable to sustain their operations. Benefit from lower taxes and better regulatory framework is needed.

The industry has seen massive wealth destruction, as many cannabis companies raised tens of billions of dollars in capital investment only to declare bankruptcy and have their facilities demolished and closed. Financial failure, despite the sector's being heavily regulated, is rare outside the major market crashes and demonstrates that the current regulatory fundamentals are broken. Companies that followed all required steps have still been unable to reach breakeven, even after investments exceeding millions of dollars. The proposed 10% flat, ad valorem tax would allow the financial pressures and situations that have been advocated in industry leaders over the years, but action from the federal government is long overdue and needed.

While Canada leads the world in cannabis production, its domestic companies are struggling under regulatory and tax burdens that make it more viable to sell products abroad rather than at home. The burdensome tax and regulatory environment are pushing consumers and producers towards illegal cannabis markets that can offer lower prices without the strict government rules, which undermines the legal industry that raises tax revenue for the government.

There has been a backlog of unpaid excise taxes in excess of over $200 million in the last years. Companies are unable to pay the taxes due to the unstable financial conditions, further endangering the sector's stability. The wave of bankruptcies has resulted in significant job losses, affecting thousands of Canadian workers across the country. Without tax relief and regulatory reform, the industry employment base will continue to shrink.

Over-regulation in innovation and potential growth of new product development, research, intervention and competitiveness are being limited by the restructuring of the tax and regulatory environment. The cannabis industry is a multi-billion dollar sector with the potential for driving economic growth in this country and job creation; however, over-regulation and excise taxation are hindering its full contribution to Canada's economic recovery.

Thank you for your attention and the opportunity to contribute to this important discussion on Canada's industries.

Thank you.

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