In March, recorded sales of regulated recreational cannabis in Canada equaled nearly $358.8 million Canadian dollars, MJBizDaily reports. These figures show a sharp increase in revenue from cannabis sales in February which topped out at CA$324.1 million.
Experts agree that the growing number of legal dispensaries, combined with falling flower prices, have allowed stores to compete with the black market and increased legal sales. In Manitoba, the seventh most populated province in Canada, cannabis purchases were up almost 15% from February, totaling CA$13.9 million. According to figures released by Statistics Canada, recreational sales overall are up 20.4% from a year ago. While Canadians have seen a shift toward non-flower products since recreational sales began, these purchases equate to only 5% of overall sales.
But this increase in cannabis sales hasn't come without a price. MJBizDaily reports that while Canadian companies are seeing more revenue than ever, the taxes that go along with it may be their downfall. The overdue excise tax duty from licensed marijuana producers has skyrocketed to CA$52.4 million ($40 million USD) as of March 2022, up sharply from CA$16 million owed in March 2021. While adult-use production licenses issued by the federal government surged 150% over the past two years, the number of companies experiencing financial setbacks also increased.
In a recent statement Dan Sutton, CEO of the British Columbia-based Tantalus Labs, told MJBizDaily, “The cannabis industry is making a choice, whether to pay its taxes or to keep the lights on.”
“I think you’ve got 141 licensed producers who had to make a choice between paying their employees and paying the excise tax,” he said in reference to companies with undisputed debts since March 2022, “and they chose to defer their excise tax payments.”
“This means they [the government] will be extracting in aggregate far less tax, because you can’t extract it from insolvent companies,” Sutton continued.
While Canadian taxpayers and businesses are calling for the government to reform its cannabis tax policies, it might be time for British Columbia to finally open up that airport dispensary we've been patiently waiting for.