Two-thirds of marijuana dealers in Canada have fallen behind on tax payments, owing millions of dollars to the Canada Revenue Agency, according to a federal report.. CannabisPhoto Credit: CBC .“The total amount of unpaid cannabis excise duties has continuously been rising since legalization,” said a report by the Competition Bureau. .“Sixty-six percent of licensees required to remit excise duties had an outstanding debt with the Canada Revenue Agency.”.According to Blacklock’s Reporter, unpaid taxes totalled $52.4 million last year. The value of delinquent payments was projected to nearly double to $97.5 million this year, said the report Planting the Seeds for Competition..In 2018, when Parliament legalized marijuana, they imposed a tax of $1 per gram in addition to the Goods and Services Tax..“With the average price per gram for dried cannabis falling since legalization, excise duties now take up a more significant portion of cannabis producers’ revenues,” up to 30% or more, wrote the Competition Bureau..“Until recently, cannabis producers licensed under the excise duty regime were required to remit excise duties to the Canada Revenue Agency monthly,” said the report. .“Many cannabis producers found this challenging as not all cannabis buyers pay for products on a monthly basis.”.In the March 28 budget, the department of Finance proposed that cannabis sellers should submit their taxes quarterly..“The Competition Bureau believes this is an important step in the right direction,” said the report..A total of 34 marijuana companies, including national wholesalers and retail chains, have gone bankrupt since 2020..“There will be more closures,” George Smitherman, CEO of the Cannabis Council of Canada, told reporters last February 15..Smitherman said regulatory mandates, fees and taxes “make our industry largely unsustainable” despite legalization. .“If you put up your hand and say you’re willing to be regulated, they have every fee and tax for you,” said Smitherman..The Competition Bureau report, based solely on interviews with “industry stakeholders” including marijuana dealers and lobbyists, said regulations were onerous. Current requirements for licensed traders include a minimum $1,638 application fee, a $1,654 security clearance fee and a $2,500 site fee..Extra expenses to meet the department of Health regulations and anti-theft can reach up to $100,000..“Illicit cannabis producers do not face these regulatory compliance costs,” said Planting The Seeds..“Without the ability to compete vigorously and effectively against an entrenched illicit market, businesses operating in Canada’s nascent legal industry cannot and will not succeed,” said the Competition Bureau.
Two-thirds of marijuana dealers in Canada have fallen behind on tax payments, owing millions of dollars to the Canada Revenue Agency, according to a federal report.. CannabisPhoto Credit: CBC .“The total amount of unpaid cannabis excise duties has continuously been rising since legalization,” said a report by the Competition Bureau. .“Sixty-six percent of licensees required to remit excise duties had an outstanding debt with the Canada Revenue Agency.”.According to Blacklock’s Reporter, unpaid taxes totalled $52.4 million last year. The value of delinquent payments was projected to nearly double to $97.5 million this year, said the report Planting the Seeds for Competition..In 2018, when Parliament legalized marijuana, they imposed a tax of $1 per gram in addition to the Goods and Services Tax..“With the average price per gram for dried cannabis falling since legalization, excise duties now take up a more significant portion of cannabis producers’ revenues,” up to 30% or more, wrote the Competition Bureau..“Until recently, cannabis producers licensed under the excise duty regime were required to remit excise duties to the Canada Revenue Agency monthly,” said the report. .“Many cannabis producers found this challenging as not all cannabis buyers pay for products on a monthly basis.”.In the March 28 budget, the department of Finance proposed that cannabis sellers should submit their taxes quarterly..“The Competition Bureau believes this is an important step in the right direction,” said the report..A total of 34 marijuana companies, including national wholesalers and retail chains, have gone bankrupt since 2020..“There will be more closures,” George Smitherman, CEO of the Cannabis Council of Canada, told reporters last February 15..Smitherman said regulatory mandates, fees and taxes “make our industry largely unsustainable” despite legalization. .“If you put up your hand and say you’re willing to be regulated, they have every fee and tax for you,” said Smitherman..The Competition Bureau report, based solely on interviews with “industry stakeholders” including marijuana dealers and lobbyists, said regulations were onerous. Current requirements for licensed traders include a minimum $1,638 application fee, a $1,654 security clearance fee and a $2,500 site fee..Extra expenses to meet the department of Health regulations and anti-theft can reach up to $100,000..“Illicit cannabis producers do not face these regulatory compliance costs,” said Planting The Seeds..“Without the ability to compete vigorously and effectively against an entrenched illicit market, businesses operating in Canada’s nascent legal industry cannot and will not succeed,” said the Competition Bureau.
