Canada’s legal cannabis journey has been turbulent to say the least. What once seemed like a promising landscape of opportunity has evolved into a terrain fraught with unexpected hurdles, leading to a cascade of challenges for industry stakeholders.
The first milestone the industry was waiting for was the Legislative Review of the Cannabis Act. The review was prepared by a team of “experts” appointed by Health Canada A recent survey by the Cannabis Council of Canada revealed that licensed cannabis producers remit as much as 35 per cent of their gross sales to excise duties. This heavy burden is a result of a formula developed by the federal government before the legalization of cannabis in 2018, when it was assumed that the average selling price for cannabis would be $10 per gram. Today, prices are closer to $3 per gram because of competition from illegal sellers.
Largely because of this heavy excise burden, it has been reported that, in addition to the significant bankruptcies, a significant number of licensed cannabis producers have chosen not to remit excise payments to the Canada Revenue Agency. According to recent, at the end of 2023 federally licensed cannabis producers were in arrears of $273.4-million to the Canada Revenue Agency, which is a 72-per-cent increase from a year earlier.