Puff, puff, don't pay your taxes!The Canada Revenue Agency (CRA) has begun forgiving millions of dollars in unpaid taxes owed by bankrupt cannabis businesses, shedding light on the financial difficulties facing the legalized marijuana industry. Blacklock's Reporter says since legalization in 2018, more than a quarter-billion dollars in excise taxes remain unpaid by licenced growers, distributors, and retailers.“Since the inception of the excise tax on cannabis up to September 21, a total of $4,718,514 has been written off as uncollectible,” the CRA stated in a report tabled in the House of Commons. All the forgiven accounts were based in Ontario, the agency noted.This is only a small portion of the total $269.8 million in unpaid cannabis excise taxes reported as of March 31, 2023. Conservative MP Tako Van Popta (Langley–Aldergrove, B.C.), who requested the data, highlighted the growing number of bankruptcies within the industry. At least 34 companies, including national distributors, declared insolvency between 2020 and 2023.The Competition Bureau has painted a stark picture of the industry’s tax woes. In its 2023 report Planting The Seeds For Competition, the Bureau revealed that two-thirds of licensed cannabis businesses were delinquent in paying taxes. “The total amount of unpaid cannabis excise duties has continuously been rising since legalization,” the report stated.Excise taxes were set at $1 per gram of dried cannabis, plus GST, when Parliament legalized marijuana in 2018. However, with declining prices for cannabis, taxes have taken an increasingly larger share of producers’ revenues. The bureau noted that monthly tax remittance requirements further strained businesses that often face delays in payments from buyers.Industry leaders have warned that legal cannabis companies are struggling to compete with black-market operations that operate outside the regulatory framework. George Smitherman, former CEO of the Cannabis Council of Canada, described the industry’s challenges in 2023: “Taxes, insurance, and other mandatory costs make our industry largely unsustainable,” he said.“There will be more closures,” Smitherman predicted, lamenting that businesses willing to operate within the law face disproportionately high fees and taxes.As bankruptcies mount and unpaid taxes accumulate, the write-offs underscore the ongoing struggles of Canada’s legal cannabis market to establish itself against organized crime and regulatory hurdles.
Puff, puff, don't pay your taxes!The Canada Revenue Agency (CRA) has begun forgiving millions of dollars in unpaid taxes owed by bankrupt cannabis businesses, shedding light on the financial difficulties facing the legalized marijuana industry. Blacklock's Reporter says since legalization in 2018, more than a quarter-billion dollars in excise taxes remain unpaid by licenced growers, distributors, and retailers.“Since the inception of the excise tax on cannabis up to September 21, a total of $4,718,514 has been written off as uncollectible,” the CRA stated in a report tabled in the House of Commons. All the forgiven accounts were based in Ontario, the agency noted.This is only a small portion of the total $269.8 million in unpaid cannabis excise taxes reported as of March 31, 2023. Conservative MP Tako Van Popta (Langley–Aldergrove, B.C.), who requested the data, highlighted the growing number of bankruptcies within the industry. At least 34 companies, including national distributors, declared insolvency between 2020 and 2023.The Competition Bureau has painted a stark picture of the industry’s tax woes. In its 2023 report Planting The Seeds For Competition, the Bureau revealed that two-thirds of licensed cannabis businesses were delinquent in paying taxes. “The total amount of unpaid cannabis excise duties has continuously been rising since legalization,” the report stated.Excise taxes were set at $1 per gram of dried cannabis, plus GST, when Parliament legalized marijuana in 2018. However, with declining prices for cannabis, taxes have taken an increasingly larger share of producers’ revenues. The bureau noted that monthly tax remittance requirements further strained businesses that often face delays in payments from buyers.Industry leaders have warned that legal cannabis companies are struggling to compete with black-market operations that operate outside the regulatory framework. George Smitherman, former CEO of the Cannabis Council of Canada, described the industry’s challenges in 2023: “Taxes, insurance, and other mandatory costs make our industry largely unsustainable,” he said.“There will be more closures,” Smitherman predicted, lamenting that businesses willing to operate within the law face disproportionately high fees and taxes.As bankruptcies mount and unpaid taxes accumulate, the write-offs underscore the ongoing struggles of Canada’s legal cannabis market to establish itself against organized crime and regulatory hurdles.
