Cannabis Producers Sound Warning on Ottawa’s New Tax Plan

Article by Daniel LeBlanc, The Globe and Mail

Cannabis producers sound warning on Ottawa’s new tax plan DANIEL LEBLANC PARLIAMENTARY REPORTER OTTAWA The root system from a cannabis cutting is photographed at the CannTrust Niagara Greenhouse Facility during the grand opening event in Fenwick, Ont., on June 26, 2018. TIJANA MARTIN/THE CANADIAN PRESS

Marijuana firms are warning that Ottawa’s move to impose an additional $100-million in taxes ostensibly to recoup regulatory costs – on top of hundreds of millions in government revenue expected from excise taxes − will hurt their ability to undercut the cannabis black market.
Health Canada, which recently announced a proposed “annual regulatory fee” of 2.3 per cent on the gross revenues of big cannabis producers, is facing industry pushback on the levy in the runup to the Oct. 17 legalization of the recreational market in this country.
The fee would be in addition to the $1-a-gram excise tax on cannabis that has already been announced and will go mainly to the provinces. Health Canada is giving companies and other interested parties 30 days to comment on the plan.
According to the federal agency, the proposed fees would allow the federal government to meet all of its costs by 2020, except in terms of law enforcement.
However, in an interview with The Globe and Mail, a spokesman for a coalition of many of Canada’s biggest cannabis producers said the new fee would be premature and hurt the nascent industry as it tries to compete with well-established illegal producers.
“We don’t believe it’s appropriate at this time to enact this new policy, until we have a few years under our belts and we have some hard data to be able to track our success in moving toward our goal of suppressing the black market,” said Allan Rewak, executive director of the Cannabis Canada Council.

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