Cannabis companies are pushing for delay for new taxes



Because Ontario is delaying the opening of retail premises with shop window until spring, cannabis producers are pushing a proposed federal levy on their sales.

Health Canada wants to beat marijuana producers on a large scale by 2.3 percent on their gross revenues to cover the costs of the federal government for the regulation of the burgeoning industry – a job that is linked to 82 million dollars in the next fiscal year.

But an industry group urges the government to suspend the levy until after 1 April, when disinfecting bricks are opened in Ontario, giving cannabis companies a better picture of what their sales figures will look like.

"We want to pay our fair share, we want to be part of the solution, our only problem with this is based on its timing," said Allan Rewak of the Cannabis Council of Canada, an industry group that included some of the largest marijuana -producers of the country, including Canopy, Tilray and Aurora.

"This is a new industry and it is one that is constantly changing, which we have just seen in Ontario," Rewak added.

Recreational cannabis becomes legal on October 17, but in Ontario, the drug is only sold through a government-run online service during the first six months after the progressive conservative government's shift to privately own and manage dispensaries.

The proposed annual fee, which applies to companies that grow, process and sell cannabis products, may increase in the future as the recreational cannabis industry stabilizes and grows, according to Health Canada, noting that a reduced fee applies to companies with gross sales of less than $ 1 million.

Public consultations on the cost recovery plan of the federal agency ran from 12 June to 13 August.

The head of a Strathroy-based marijuana producer highlighted the many costs growers face to comply with the country's strict safety, sanitation and quality control guidelines, and says that Health Canada should "look at the big picture "before the levy is imposed.

"We also have excise duties," said Linda Rombouts, Natural MedCo CEO, about the tax of $ 1 per gram on cannabis that has already been set up and which mainly goes to provinces.

"We have a lot of extra costs, it would be nice if all of that could be considered before they (cost) fit."

Rewak says that the federal government should take a year before the levy would be implemented, noting that companies would get a chance to know their third and fourth quarter revenues, a step that would also bring Health Canada exact costs for regulating the industry.

"They may need more, they need less than we can … build something that is honest and transparent and something we all know," he said about the annual fee.

The 2.3 percent levy will not paralyze the cannabis industry – consumer spending on legal marijuana will reach $ 12.9 billion worldwide this year, according to a recent report from Arcview Market Research – but it could hamper corporate efforts to expand and jobs to create throughout Canada. Said Rewak.

"Regulatory power will not stop the growth of the cannabis industry, but will positively impact its impact on communities in communities because it involves more money in the hands of the government, investing less in our communities," he said.

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