Canada is set to explore a new excise tax system for cannabis businesses next year in welcome and long-awaited efforts to ‘cut red tape’.
In its ‘2024 Fall Economic Statement’, published this week, the Federal government announced new plans to ‘explore a transition from cannabis excise duty stamps specific to each province and territory to a single, national stamp’.
The current system requires producers to navigate 13 separate provincial and territorial excise stamps, a logistical headache that industry leaders argue adds significant costs and administrative burdens.
Canada’s excise tax on cannabis, which sits at $1 per gram or 10% of a producer’s selling price (whichever is higher), has long been the Achilles heel of its adult-use industry, leading to a thriving illicit market and a growing trend of Canadian producers selling products abroad to increase profits.
It has also caused a huge backlog in payments, with reports suggesting that as of the middle of 2023, some $200m was owed to the Canada Revenue Agency (CRA) in excise tax.
[…]
While the harmonized stamp is seen as a positive development, it doesn’t address the industry’s larger concerns about the federal excise tax rate itself. Producers argue that the high tax burden, combined with operational costs, threatens the viability of legal businesses, particularly small and micro-producers.
Read the full article at Business of Cannabis
