Canada has seen a dramatic increase in the amount of unpaid regulatory fees owed by cannabis companies to the federal government over the last year.
According to Health Canada figures published by MJBizDaily, in the fiscal year 2022-2023 overdue fees jumped by 225% from C$1.2m to C$3.9m.
This figure relates solely to the annual regulatory fee applied to licences, which generally amounts to 2.3% of gross revenue, and is used to cover the costs associated with regulating the industry.
The news has driven yet more discontent among Canadian cannabis stakeholders who claim the country’s tax system is stifling businesses, with the tax collected by the government in fiscal year 2021-2022 representing nearly half of industry wide wholesale sales.
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According to Mitchell Osak, president of Toronto-based Quanta Consulting, this ‘hostile operating environment’ is likely to mean that many companies are on the brink of collapse.
“The LPs don’t have the money to pay (the government) on time, when more mission-critical business needs like payroll are staring them in the face,” he told MJBizDaily.
“Realistically, many of these fees won’t ever get paid to the government because the companies will go out of business.”
He added that many companies could be actively choosing not to pay out of a sense of anger at the government.
