Some Canadian cannabis producers say they are unhappy with the federal government’s proposal to lower the price ceiling for medical cannabis reimbursements through Veterans Affairs Canada (VAC).
The proposal, which was part of the federal government’s Budget 2025, was tabled in the House of Commons on Tuesday, November 4.
The government intends for this reduction to better match the declining cost of cannabis in Canada, while saving a projected $4.4 billion over the coming years. The new proposed ceiling for the cost VAC will cover for medical cannabis is $6.00 a gram, down from $8.50 a gram.
In 2024-2025, Veterans Affairs Canada reimbursed its members for nearly 30,000 kilograms of cannabis, totaling almost $245 million. Since 2011, the program has compensated over $1 billion worth of cannabis, exceeding 143 million grams, to eligible military personnel and other qualified individuals, including RCMP members. While some in the cannabis industry had hoped this year’s budget would include measures to assist Canada’s cannabis producers such as changes to the excise rate, export support, or a single federal excise stamp the proposed changes have caught the industry off-guard, especially those companies that serve the medical market.
“We’re disappointed that the federal government has proposed these changes without consultation from the cannabis industry or medical cannabis companies like Aurora,” said Aurora CEO Miguel Martin. Given the newness of the announcement and what Martin said was a lack of consultation with the industry, he says he is still considering how the proposed changes, if implemented, could affect Aurora and other cannabis producers.
Aurora emphasized that cannabis producers play a critical role in maintaining quality and safety for veterans who rely on prescribed cannabis treatments.
Beena Goldenberg, CEO of Organigram Global Inc., another leader among Canadian cannabis producers, echoed similar concerns. She said that the federal government’s failure to address excise tax reform and export opportunities could hurt Canada’s competitive advantage. Goldenberg warned that without timely reform, cannabis producers could face shuttered facilities, lost jobs, and reduced innovation.
Goldenberg added that cannabis producers have already supported over 227,000 jobs and generated $16 billion in GDP for the Canadian economy. She emphasized that with thoughtful policy updates, Canada can still lead globally in cannabis exports, product innovation, and research.
For now, cannabis producers like Aurora and Organigram remain committed to working with Parliament and Veterans Affairs Canada to ensure fair reimbursement models, protect patient access, and build a sustainable, globally competitive industry that continues to serve veterans and strengthen Canada’s economy.
