Canada to hike cannabis business fees
The Canadian government is increasing eight fees imposed on the legal cannabis sector beginning April 1. Inflation is given as the primary reason for the increase in fees. The notification comes at a time when outstanding fees from pot businesses persist to climb in Canada. The fee raises for Canadian cannabis operators are in line with the country’s inflation rate, which is 4,4% in the 12 months up to April 2023, according to an update in the Canada Gazette.
The new regulatory fees
- Micro-cultivation license application screening: CA$1,969
- Typical cultivation license application: CA$3,933
- Micro-processing application screening: CA$1,969
- Routine processing application screening: CA$3,933
- Nursery license application screening: CA$1,969
- Medicinal cannabis retail license app screening: CA$3,933
- Security clearance app: CA$1,987
- import or export permit applications: CA$734
In addition, businesses are responsible for a independent annual regulatory fee of either a flat fee or a portion of their gross profit.
The government-levied fees help settle the expenses of regulating Canada’s legal cannabis industry, which comprises the payment of many federal employers.
Some cannabis operators, in particular those who encounter financial despair, will be exempt from paying the fees, however.
Outstanding fees have been increasing in Canada since 2019 and have reportedly hit CA$3.9 million (US$2,87 million) for the fiscal year 2022-2023.
The annual regulatory costs are normally calculated as 2.3% of a business’s gross income.
Cannabis is More Profitable Than Alcohol
The Canadian administration also gathers tax from the sale of cannabis products. Last year, this form of tax revenue brought in more dollars than beer and wine.
In the 2023-23 fiscal year, beer and wine yielded CA$887.7 million in tax for the government. Cannabis excise taxes meanwhile brought in CA$894.6 million, according to MjBiz.
A parliamentary panel has developed a recommendation to request the government to relieve the cannabis tax, which for dried cannabis plants is either CA$1 per gram or 10% of the value of the gram.
In the case of edibles, extracts and topicals, it’s one cent per milligram of THC in the product.
In some circumstances, manufacturers are being placed in a situation where they have to pay more than 30% of the revenue they spawn. Canadian cannabis firms are now virtually railing against the high rates as a collective.
More from Soft Secrets:
L
Liz Filmer
.JPG)
