Canadian marijuana producers owe the Canada Revenue Agency almost $200 million in unpaid duties and taxes in the latest threat to the sector’s viability..According to the Marijuana Business Daily, federally licensed cannabis producers owed the CRA $192.7 million as of March 31, nearly triple the $52.4 million in 2021-22 and just $16 million the year before. .The numbers show 213 of the country’s 522 licensed producers are in arrears. The CRA is reportedly issuing demand notices to pay up or risk severe penalties, including seizure of assets..A representative from the Cannabis Council of Canada (C3) confirmed those numbers to Western Standard..Under CRA rules, excise duties and dried cannabis amount to the greater of $1 per gram or 10% of its value. According to the Canadian Cannabis Exchange — a privately owned trading platform — wholesale prices for all its THC indices were $1.71 a gram in April, which means the federal government is taking nearly 60% of all cannabis revenues before GST, GST and any other provincial excise tax.. Pot exciseEach province has a different coloured excise sticker for canabis. .Canadian governments — federal, provincial and municipal — raked in $1.5 billion in taxes and fees in 2022, on sales of about $4 billion according to Statistics Canada. CRA collected about $514 million in excise duties in 2021, according to the government accounts..By comparison, alcohol netted governments about $13.6 billion..When the marijuana tax laws were drafted in 2018, the government assumed a retail price of $10 per gram, but according to CCX 61% of all sales on the Ontario Cannabis Store website were priced in the $3-$6.50 range. A report by Deloitte suggested consumers would be willing to pay a maximum of $8.98 per gram in a regulated legal market..Production has continued unabated. According to Health Canada data, federal licence holders had 1.2 million kilos — more than 1,300 tons — of unpackaged inventory in storage as of September, 2022.. Pot inventoriesCanadian producers had 1.2 million kilos of unsold inventory as of September, 2022. .That in turn led to massive layoffs in the sector. So far Canadian producers trimmed almost 1,000 jobs, including 85 in Olds by Calgary-based producer and retailer SDNL. Shares of publicly traded pot companies fell by a similar margin..According to C3 president George Smitherman, the federal government failed to take meaningful steps at industry reform in its latest budget in March..“Almost five years ago, the Trudeau government led the way and created a regulated adult-use cannabis sector Canadians widely accepted. This historic decision also met with acclaim from our provincial and federal governments who reap the rewards, but it’s been a commercial failure for cannabis producers and processors,” he said..Smitherman will be in Edmonton this weekend to attend the GrowUp Conference and Expo, the country’s largest trade show which runs from May 28-30.
Canadian marijuana producers owe the Canada Revenue Agency almost $200 million in unpaid duties and taxes in the latest threat to the sector’s viability..According to the Marijuana Business Daily, federally licensed cannabis producers owed the CRA $192.7 million as of March 31, nearly triple the $52.4 million in 2021-22 and just $16 million the year before. .The numbers show 213 of the country’s 522 licensed producers are in arrears. The CRA is reportedly issuing demand notices to pay up or risk severe penalties, including seizure of assets..A representative from the Cannabis Council of Canada (C3) confirmed those numbers to Western Standard..Under CRA rules, excise duties and dried cannabis amount to the greater of $1 per gram or 10% of its value. According to the Canadian Cannabis Exchange — a privately owned trading platform — wholesale prices for all its THC indices were $1.71 a gram in April, which means the federal government is taking nearly 60% of all cannabis revenues before GST, GST and any other provincial excise tax.. Pot exciseEach province has a different coloured excise sticker for canabis. .Canadian governments — federal, provincial and municipal — raked in $1.5 billion in taxes and fees in 2022, on sales of about $4 billion according to Statistics Canada. CRA collected about $514 million in excise duties in 2021, according to the government accounts..By comparison, alcohol netted governments about $13.6 billion..When the marijuana tax laws were drafted in 2018, the government assumed a retail price of $10 per gram, but according to CCX 61% of all sales on the Ontario Cannabis Store website were priced in the $3-$6.50 range. A report by Deloitte suggested consumers would be willing to pay a maximum of $8.98 per gram in a regulated legal market..Production has continued unabated. According to Health Canada data, federal licence holders had 1.2 million kilos — more than 1,300 tons — of unpackaged inventory in storage as of September, 2022.. Pot inventoriesCanadian producers had 1.2 million kilos of unsold inventory as of September, 2022. .That in turn led to massive layoffs in the sector. So far Canadian producers trimmed almost 1,000 jobs, including 85 in Olds by Calgary-based producer and retailer SDNL. Shares of publicly traded pot companies fell by a similar margin..According to C3 president George Smitherman, the federal government failed to take meaningful steps at industry reform in its latest budget in March..“Almost five years ago, the Trudeau government led the way and created a regulated adult-use cannabis sector Canadians widely accepted. This historic decision also met with acclaim from our provincial and federal governments who reap the rewards, but it’s been a commercial failure for cannabis producers and processors,” he said..Smitherman will be in Edmonton this weekend to attend the GrowUp Conference and Expo, the country’s largest trade show which runs from May 28-30.
