The Ben Mulroney Show - Time to exhale and take a deeper dive into the impact of legalizing cannabis

Episode Date: September 2, 2025

GUEST:   Beena Goldenberg, CEO, Organigram Global If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! ⁠⁠⁠⁠⁠⁠https://link.chtbl.com/bms⁠⁠⁠⁠⁠⁠ Also, on youtube -- ⁠⁠⁠⁠⁠⁠https://www.youtube.com/@BenMulroneyShow⁠⁠⁠⁠⁠⁠ Follow Ben on Twitter/X at https://x.com/BenMulroney Insta: ⁠@benmulroneyshow⁠ Twitter: ⁠@benmulroneyshow⁠ TikTok: ⁠@benmulroneyshow⁠ Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

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Precisely. Sounds like a plan. You know, just one thing. What's that? I'm choosing the music. What? And I'm sitting in the back seat. The whole way?

The whole way. You are listening to the Ben Mulroney show. Thank you so much for joining us. It is Tuesday. September 2nd, Labor Day is behind us. We're in for. a short week. Our kids, by and large, are back in school. It's the beginning of something new. Speaking of something new, we've got, well, not, he's not new, but he has not been the force of tennis

that we expected a few years ago. And now it seems like Felix Oje aliasim is making waves and possibly living up to the expectations that we foisted on him so many years ago. It's a very well-read script where we've got a lot of great talent in this country and a lot of these young, talented players come out of the gates strong only to then sort of level out. Well, that's what he's done for the past few years, level out. But right now at the U.S. Open,

Felix Oje aliasim is one of the ones to watch. He was supposed to be one of the next generation of superstars. You know, once the big three of Federer and Nadal and those guys. And Joker, yeah. Once those guys left. And then he and Dennis Chappavalaugh, just never, they seemed on the cost of breaking through and then just never did. Well, by all accounts, his quarter final match was a clinic.

And a lot of people were looking at it saying, if this is what he's capable of, then, yeah, he can go, he can change his own destiny. So he's moving into the quarters right now. He's moving into the course. Oh, yes. The, what was it? Fourth round. Fourth round of the quarters, exactly. But hey, Felix Oje aliasim,

if you do not know how to pronounce his name yet, you will, I promise. Just call him Felix. Cannabis has been legal in this country since 2018. And it is my contention that only Canada would screw up selling drugs. Like, we're the only country in the world. screw up selling drugs because we came, again, came out of the gate strong, and yet it is not the boon for either investors or growers or, well, certainly they're raising a lot of tax revenue, but it's not the success that we thought or hoped it would be.

That being said, a few particulars about cannabis in Canada that I think are pretty interesting. legal cannabis is now New Brunswick's most valuable crop with farm cash receipts hitting 269 million in 2022. That's more than potatoes. That's more than dairy. That's impressive. And that's a big deal

considering the East Coast and potatoes. Nationally, cannabis generated $2.7 billion in farm cash receipts in 2024 outmatching greenhouse vegetables. That was $2.63 billion and field vegetables, $2.44 billion. but we'll talk about the finances around it after let's talk about the social implications there was a snap summary a survey of Canada's cannabis industry since legalization so

usage has gone up right by 2021 around 27% so about a quarter of Canadian adults had used cannabis in the past year with the highest rates among young adults nearly 39% from ages 18 to 24. And I remember years ago, people would say there, it's, there are no negative health implications to cannabis. No one's ever had an overdose of cannabis, which may or may not be true. I don't know. But that was, that was them telegraphing that it was nature's, like it came from the earth

and it was good for you. Well, adolescents saw a 43% surge in edible use post-legalization with over. Overall, youth, cannabis youth, use, youth, the two youths, up 26% and among older adults, 65% ER visits from cannabis poisoning doubled post-2018, then tripled after edibles became available in 2020, because people just don't have to dose properly. Well, that's, that's a big thing because there's a lot of people who tried it out that had had no clue about it. And I thought it was actually one of probably the defining moment of the positive defining moment of Trudeau's time, because all those years of people going

to jail for cannabis was just, okay, that's a little much. Oh, 100%. But I remember that moment during the election campaign where Justin Trudeau was in a park, I think in Vancouver, and I think he just got really excited. And he said, I don't just want to decriminalize marijuana. I want to legalize it. And I have. actually remember saying at the time, like, you know what, like maybe we should decriminalize it first and figure it out. And once decriminalized, you can let everybody out of jail. I was speaking to somebody this past weekend about that. Somebody who worked in government at that time and said that, who told me that at that time, Trudeau actually said that just off the cuff.

Yes, exactly. I knew it. He said it off the cuff. And what happened was the party then had to reverse engineer a policy that made sense with what the leader had said. which is why we heard them say we are going to legalize it in a way that tamps down on the black market and protects kids, right? Those were the two things. Did it tamped down on the black market?

Not necessarily. Huge economic footprint, but bleeding money. Legal cannabis has added roughly $43.5 billion to Canada's GDP. It supports 98,000 jobs and generated over $15 billion in tax revenue since legalization. That's good.

Yet most licensed producers report negative net income, because of the heavy regulation and, surprise, surprise, the black market. So the black market still exists. They didn't tamp down on the black market. As I was saying, if you got your guy who you trust, you're going to keep going to your guy. Spending on legal recreational cannabis hit $5.1 billion in 2022 out of nearly $8 billion total with illicit sources still accounting for 30% of the market. And that's with this massive expansion of retail. The number of legal cannabis retail stores soared from under 200 at the end of 2018 to over 3,300 by mid-20203.

That's like they're like Tim Hortons. They're everywhere. Well, no, there's more than that. And like someone pointed out, we're talking about the LCBO. Someone pointed out that between two LCBOs, you'll probably have 15 cannabis shops. Probably. Yeah, it's, it is a crazy. a crazy amount of stores and the regulation that the stores have to deal with because we have

to protect the kids, right? That's why they can't have, you can't see through into the windows and there's, it's a very onerous way of shopping. I just looked up the number of Tim Horton's stores, 3,500 in 1 as of June 3rd. And 3,300 cannabis shops. So you're right. You're absolutely right. But yeah, the problem that I see is the leader got so excited. that the party then had to come and figure out how to deliver on what he sort of

made up on the fly and in doing so we sort of created a system where the retailers are punished and the one thing we said we said we're going to protect kids I don't know if that's true that's my big concern because we do know that kids' brains

aren't fully formed until they're mid-20s and you do not want You probably knew kids when you were growing up who really got into smoking weed and I knew bunch that were really smart and they got far too much into the drugs and it did impact their brains. You could see it.

But of course it would. Because it's not good for kids. As an adult, I have no problem with it at all. I'll tell you, the thing that I like the most about is what you said. The fact that you have no longer were you going to get arrested and we were going to clog up the courts

and we were going to ruin somebody's life because they had a joint on them, right? The amount of money that was spent on policing and incarcerating, prosecuting, all that stuff, that's done. We don't do that anymore. It'd be nice. I mean, one would think that if we weren't doing that anymore, there would be so much more money to go around in those sectors, but sadly, that's not the case. And it's used widely for people who have cancer patients, autoimmune peace.

So then they're not on heavy opioids. they use marijuana, THC, CPD to actually calm themselves down as pain. I think I saw a 60 Minutes episode where somebody had like uncontrollable like hiccups or something. It was, they had a diaphragm that they couldn't control. And then with this particular strain of medicinal marijuana, they were able to control it in a way that nothing else could. And so that's, there are absolutely far more applications than simply the recreation of it all. And you know, with like my back.

seizes up every once in a while. And, you know, so I'll use one of the CBDs. Yeah. It doesn't get you high, but it actually calms you. You can sort of a body relaxation, and it helps. All right. So now, uh, now let's take a look at the bigger picture. How has cannabis added to the job market?

That's coming up next. Welcome back to the Ben Mulroney show. And before the break, we were sort of giving you the lay of the land of the cannabis industry in Canada. as we see it. And it seems to me like it takes up a lot of space. It's a big thing in this country. There's a lot of money that's being generated, a lot of tax revenue that's being generated, lots of jobs are being generated. But it also seems like it is not working nearly as well or as optimally as it could be. And so to drill down on the good and possibly the bad and how to make it better, we're joined now by Bina Goldenberg, the CEO of Organogram Global.

Beano, welcome to the show. Thank you for having me. So, listen, I am by no means an expert in this industry, but would you say that what I just said is a fair assessment, generally speaking of where the industry is? Absolutely. Yeah? We generate a lot of jobs.

We generate a lot of tax revenue, a lot of the Canada's GDP, and yet we have so much more we could offer if this segment had some, some changes. The government would help us with some of the changes to reach its full potential. So let's start with the good. Let's start with what is, because it happened quickly, right? From 2018 to today, that's not a long time. And all of a sudden, hundreds of thousands of jobs, billions of dollars in revenue, billions of dollars in tax revenue. So lots of good there,

right? Well, no, for sure. So listen, in 2024, the cannabis industry generated, $16 billion in tax revenue. And to put that in perspective, think about breweries that generate $2.6 billion or logging and forestry, $3.3 billion. So the cannabis industry, $16 billion. Now, that's $8.4 billion direct from producers and sellers, but it's also $7.4 billion from suppliers, logistics suppliers, packaging suppliers, professional services. It is a big economic driver and deserves to be recognized as that. So you talked about jobs, 227,000 jobs, and it's not just in big cities. It's across the country. It's in local communities. Look, we have our flagship facility in Moncton, New Brunswick. We have a facility in Winnipeg, but we also have a facility in

Lax Superior, Quebec, and Elmer, Ontario. So we're just not talking about the large cities. We're talking about across country. It's a big driver. Oh, absolutely. And so, so that's the good, right? But again, it's not, it feels to me like it is not as optimally designed as possible. It feels like, as we said before, that a lot of the retailers themselves are in a financial whole. And from what I understand, a lot of the publicly traded cannabis companies are not necessarily as big as successful. as a lot of people anticipated. Correct.

So let me just say, number one, organogram is the number one licensed producer in Canada by market share. And in our last fiscal year, we generated $8.4 million in profit. We paid $87 million in excise tax. So just think about that. So what is the biggest challenge for the industry? It is the excise tax that we have to pay. We are paying roughly 35% off the top of everything we sell to the government.

And can I ask, what is the justification for a tax rate that's that high? Right. So back in 2018, and look, it was a new industry. The government had to find a way they said, look, cannabis is selling at $10 a gram. We'll tax it at $10, $1 a gram, whichever is higher. Now, that sounded reasonable, except that then we had to compete with the illicit market. We're now selling cannabis at $3 a gram and yet still paying that $1 per gram, which is why it's over 30%. And really, the ask of the government has go back to the original 10%, which is a fair rate.

Now, think about it. Currently, in cannabis, we pay 12 times more than wine and six times more than beer. The excise tax has caused many cannabis companies to go into CCAA and then wipe out all the excise that they owe the government. Many have struggled. And the larger licensed producers that are publicly traded aren't making the profits because so much of it is going to the government. And, Bina, correct me if I'm wrong, but there's no situation where companies like yours could export their product. No, no, that's not true. We do export product. We export product to Germany, to Australia, to the UK. We're now looking at Poland and Czechia. So globally, we are selling product. But what we don't have is support from the government in terms of a national export strategy. So where other industries get funding, get support, trade mission support, get innovation support. We just don't get it because the cannabis industry just hasn't had access. to those. And really, it's a bit of the stigma that comes with the industry. But think about it.

This is an industry that has homegrown Canadian. And by the way, the U.S. cannot export to other markets in the world because it is still illegal there. So Canada has this first mover advantage. We could sell and the market is growing. The expected global market will be $140 billion in 26. So, Bina, so take the excise tax. We've talked about that off the table. If you had the ear of the government and you, and they said, tell us how we can improve this ecosystem. What are the, what are the high level changes that need to happen so that the, the industry can become the fullest expression of itself? Yes. So, I mean, we said take exiles off the table, but that has to get done. We have a reform at least. We need a national export strategy to take advantage of this

and really capitalize on the growing global market. We need the government to actually tamp down on the illicit market. You talked earlier, 30% of the illicit markets out there, they're not paying any tax revenues. They don't have the regulations. They don't have the protection against youth in terms of age gating. There is a whole opportunity. to deal with the illicit market and that the government hasn't addressed. And Bean, I would think that some of the taxes that you pay could go to that. And yet, you don't, that's not happening. That was the original promise that it would go to that.

But think about it right now. Somebody could be scrolling through on Facebook or Instagram and see an advertisement for a gummy. And they will buy it using their credit card and it'll get shipped to them by the Canada Post. And that's totally illicit market. And consumers don't even understand that. Because right now you can't buy something online unless it's through the OCS that's legal. Yeah. People see stores in downtown Toronto, bright stores.

They look in and they go in and it's an illicit store. And the problem is that until the government actually deals with those stores and shuts down that illicit online trade, you know, this is we're paying a lot of money, the legal market, and we're, competing against an illicit market that's allowed to. Oh, I think we lost her. I think we lost her. Oh, no. I had so many more questions. Let's see if we can get her back.

Well, I don't know if you have any time. Because I would have loved to have asked the question, are there too many retail shops? Because it does feel like, you know, there's two or three on a block every now and then. And did they give out too many licenses? You know, do we need as many cannabis shops?

in Canada as we have Tim Hortons. Well, there have been people from running those shops. A number of them have closed. Yeah. Tokyo... Tokyo Rose? Tokyo Smoke. They closed the number of stores because there's just too many around there.

Yeah. There's too many around. And the regulations in place make it very expensive to run. I have to assume the insurance is very high. And if we want this business to succeed, you've got to look at it from the corporate side, but also on the retail side. And you have to attack the problem from both sides. If that excise tax gets lowered and if some of that money gets directed to tamping down the black market

and if some of the regulations perhaps come down on the retailers and maybe they start thinning the herd, so instead of 3,300, there are maybe 2,500. Well, they certainly made a mistake by that by just allowing them to expand. because originally they were just handed out a certain number of licenses and there's only going to be a certain amount of stores and then all of a sudden, I don't know, how did it happen? Then suddenly it just exploded. I have no idea.

I think they realized there was money to be made in it and the government wanted more of it. But there was no meat left on the bone for the businesses. Well, I want to thank Beena for being here and hopefully we can have her back soon. I don't know what happened to her connection. We're renovating a hotel, expanding our resort, and breathing some life back into the lakehouse. Out of here.

All while raising a family. It's messy, it's real, and it's all us. Exciting. I can't tell if that's your exciting face. This isn't just construction. This is our life. Who needs sleep? Building Bomber.

News Series Sunday, September 7 on Home Network, stream on Stack TV. I do.