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5 Canadian cannabis producers face May deadline in ‘extracts/edibles’ conflict

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Health Canada has asked five companies to stop distribution and sale of noncompliant cannabis edibles products by the end of May and provincial wholesalers have been notified of the ongoing crackdown after months of confusion, MJBizDaily has learned.

Canada’s cannabis industry and the federal government have been on a collision course over the products since January, when Health Canada started asking some licensed companies to stop selling certain ingestible marijuana products.

The industry says the products are appropriately classified as cannabis “extracts” because the ingredients used are not food and, thus, are compliant with federal marijuana regulations.

However, Health Canada, the nation’s federal cannabis regulator, has said the affected products are improperly classified as “extracts” and should actually be categorized as “edibles.”

The distinction is important because any cannabis product classified as an extract has 100 times more allowable THC per package than a product classified as an edible.

For instance, certain packages of Ottawa, Ontario-based Indiva Limited’s Wild Cherry Lozenges and Life Lemon Lozenges contain 100 milligrams, 250 milligrams and 500 milligrams of THC per package.

However, if those were classified as edibles, they would be limited to no more than 10 milligrams of THC per package.

Indiva was one of the five companies hit with a notice of noncompliance letter by the federal regulator.

Toronto-headquartered Organigram Holdings also said it received a notification from Health Canada claiming some of its products were incorrectly classified as “extract” rather than “edible.”

Both Indiva and Organigram paused production of the affected product formats.

Health Canada released a long-awaited compliance statement in early March intended to help identify products improperly classified as extracts.

Deadline looms

Health Canada said federal license holders with noncompliant products are expected to “stop further distribution and sale” of those products in question by May 31.

To date, five noncompliance letters have been issued regarding affected product formats, but that number might grow “while we (Health Canada) gather information from them on their products,” a spokesperson told MJBizDaily via email.

Asked what consequences license holders could face if they fail to comply, the spokesperson said Health Canada’s preference is for regulated parties to voluntarily undertake actions to regain compliance.

“However, Health Canada may take enforcement measures to address non-compliance or mitigate risks to public health or public safety as outlined in the Compliance and enforcement policy for the Cannabis Act,” the email noted.

Those measures could range from calls and letters – which are intended to educate and prevent noncompliance – to inspections to measures intended to correct noncompliance or address a public health or safety risk.

Those could include the suspension or cancellation of a federal license or the issuance of administrative monetary penalties up to 1 million Canadian dollars ($730,000).

Health Canada also told MJBizDaily it recently informed provincial wholesalers of the situation.

The Ontario Cannabis Store, the largest marijuana wholesaler in Canada, subsequently sent letters to suppliers on March 15.

In one such letter viewed by MJBizDaily, the wholesaler reminds the recipients they must ensure products they sell to the OCS are compliant with applicable laws and regulations.

“If you currently sell or have proposed to sell products to the OCS that may be affected by the Compliance Statement, you must provide the names and brands of the affected product(s) by the end of day, March 24, 2023,” the letter reads.

The letter, sent by OCS Chief Operating Officer Denny Palarchio, says the agency “will continue to replenish and accept deliveries” for the affected products until May 31, 2023.

Industry reacts

Industry sources say the crackdown will cost the struggling industry tens of millions of dollars.

They also say Health Canada’s crackdown is a gift for the underground market, since legal cannabis edibles containing no more than 10 milligrams of THC per package can’t compete with illegal products that don’t face such restrictions.

Another source of frustration is the fact that the products Health Canada is trying to pull from the market already underwent the government’s so-called Notice of New Cannabis Product (NNCP) process, which requires licensed producers to notify the regulator months in advance of new products.

While that process doesn’t mean those products were necessarily “approved” by Health Canada, the agency would have signed off on and been aware of the respective products, including the amount of THC contained in each package.

Shane Morris, founder of Ottawa-based Morris & Associates Consulting, said serious questions need to be asked about why Health Canada reviewed several NNCPs for these products and then allowed them to exist in the market for years.

“For example, the Organigram Jolts were launched in August 2021 and subsequently had multimillion-dollar sales. How does this happen?” Morris asked.

“Regulatory certainty is a key element of good regulatory policy. Having the regulator change their minds overnight after months or years of allowing reviewed products in market speaks to either incompetence and/or gross inconsistency on the part of Health Canada.”

Morris wants the industry to ask for an independent review of this situation.

Source: https://mjbizdaily.com/5-canadian-cannabis-producers-face-may-deadline-in-extracts-edibles-conflict/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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