In recent years, following the legalization of recreational marijuana in 2018, Canadian government organizations have provided support to cannabis companies in the form of funding programs. These programs have contributed approximately 32.8 million Canadian dollars thus far and have significantly impacted the success and growth of various companies within the industry.
Nearly two dozen companies received over 3 million Canadian dollars in federal funding in the past year via the government’s Grants and Contributions portal.
Diverse range of funded projects
The amount of funding bestowed upon recipients has greatly varied. For instance, Ricci Cannabis was given 7,380 Canadian dollars for a nonalcoholic cannabis beverage project. In comparison, Pbg Biopharma received a generous sum of 5.4 million Canadian dollars through the Regional Economic Growth through Innovation program. This variation highlights the diverse range of projects and initiatives these businesses undertake and how the federal government supports a broad spectrum of development within the cannabis industry.
Impact of funding on individual companies
One example of how substantial government funding has been is the case of Tantalus Labs. The company received 2.9 million Canadian dollars from Western Economic Diversification Canada to expand its greenhouse for increased cannabis production in 2020.
Another testament to this financial support’s importance comes from Canna Stream Solutions’ co-founder and CEO, Usukuma Ekuere. He stated that, without grant money, their company would be struggling to maintain operations and achieve consistent growth.
National Research Council of Canada’s role in funding
Besides direct funding from government organizations, the National Research Council (NRC) of Canada has also made significant contributions to cannabis-related projects. Data reveals that the NRC provided 4.3 million Canadian dollars in funding for the fiscal year ending March 2023.
Companies like Aqualitas have benefited from their connection to the NRC. They received approval for two NRC programs this year, including a youth employment contribution and an R&D contribution through the Industrial Research Assistance Program (IRAP).
Additional funding avenues: SR&ED tax incentives
Apart from government grants and contributions, another helpful option available to cannabis companies is the Scientific Research and Experimental Development (SR&ED) tax incentive program. This program offers financial support for research and development initiatives undertaken by businesses within the industry.
Advice for cannabis businesses seeking funding
To increase chances of securing financial support from various government funding programs, it’s essential for businesses to:
- Familiarize themselves with available funding programs at all levels of government;
- Prioritize understanding eligibility criteria and application deadlines;
- Monitor announcements regarding new or updated grant and funding opportunities;
- Draft clear, concise project proposals outlining goals, potential impacts, and required resources;
- Seek professional advice on maximizing chances of receiving funds, such as working with consultants experienced in crafting successful applications.
Governmental support for cannabis companies in Canada plays a significant role in driving growth, innovation, and success within the industry. Programs designed to financially back these companies encourage the advancement and overall prosperity of the sector. By staying informed and proactive about potential funding opportunities, businesses operating within the cannabis space can bolster their endeavors and contribute to developing a thriving industry.