"This feels like quite a big deal," said Lai, who has been based in Montreal for the past decade and returned to Australia to accept the prize.
"The Australian publishing landscape has historically been not that supportive of comics, it's very hard to get a comic published in Australia," she said.
Lai is also the first transgender writer to win the award, which is open to women and non-binary authors, in its 14-year history.
She says her feelings about winning the Stella Prize are complicated because other trans creatives struggle with family support, housing stability and access to gender-affirming healthcare.
"There are a lot of brilliant creatives who are trans people who aren't getting published; I think there are a lot of barriers," she said.
Set in Montreal, the book tells the story of repressed heroine Lucy who works in a busy restaurant, loosely based on a place Lai worked when she first moved to the city.
Lucy, otherwise known as Cannon, also cares for her elderly grandfather and is taken for granted by her best friend.
When the pressure gets too much, the main character is sometimes surrounded by mysterious black birds.
"It's my attempt at a portrait of anger - anger has been a very interesting experience for me, it's something I was very avoidant about in my life," Lai said.
Cannon is a truly exceptional feat of the graphic novel form and the win will expose the book to new readers nationwide, Stella chief Fiona Sweet said.
The story is relatable, funny, wise and very weird, Chair of Judges Sophie Gee said.
"This is a novel of immense skill and power that uses words and the visual language of comics to construct a complex and pleasingly unresolved story that readers can't put down," she said.
Lai has already won several international awards for her work and was shortlisted for the Stella in 2021 for her first novel Stone Fruit.
She will appear at events presented by Stella in Brisbane, Melbourne and Sydney during May.
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