Tilray Brands Inc (TLRY)

[Bonno]

I wish they paid their taxes like good corporate should.


Photo by Larysa and Feng Yu/stock.adobe.com
Canada’s federal government accounts for a growing share of the unpaid debts racked up by failed cannabis companies, lending credence to claims the nation's nascent adult-use industry is suffering from pricey fees and heavy taxation.

A review of recent insolvency filings by MJBizDaily found that the Canada Revenue Agency, the federal tax collection body, and Health Canada, the national department in charge of regulating cannabis production, are commonly among the biggest unpaid creditors for insolvent marijuana producers.

In the 2021-22 fiscal year, various levels of government collected more than 1.5 billion Canadian dollars ($1.2 billion) from the cannabis industry via excise tax, other taxes (such as sales taxes) and various fees, including the annual regulatory fee.

However, the amount of unpaid federal excise tax and fees has skyrocketed.

Licensed producers owed the Canada Revenue Agency CA$192.7 million as of March 31, 2023, while unpaid regulatory fees jumped to almost CA$4 million.

“It's increasingly clear that, for many cannabis companies, insolvency is the result of a formula where taxes and fees squeeze out such a big proportion of the overall price,” George Smitherman, CEO of the industry group Cannabis Council of Canada, told MJBizDaily International Editor Matt Lamers.

Poor quality cannabis grown at scale has to be destroyed and most of their grow cannot be sold.

Fierce competition, a glut of product and falling wholesale prices are also weighing on this doomed industry.