Small cannabis producers push for excise tax reform in Canada
Dan Sutton, CEO of Tantalus Labs, a cannabis producer based in British Columbia, is trying to draw attention to a problem that, according to many industry players, threatens to drive small Canadian cannabis companies into bankruptcy.
The main problem? The excise tax levied on cannabis is set at a fixed rate of 1$CA per gram, rather than as a percentage of sales. According to Dan Sutton, the tax should instead be based on the volume produced or sold, as is the case in the beer industry.
Dan Sutton launched the campaign with the goal of changing the law Stand for Craft [Editor's note: «Support local artisans,» where Craft refers to a certain type of license granted by Health Canada] to put pressure on politicians.
If you believe that small businesses deserve a place in the future of the Canadian cannabis industry, we need to hear from you today.
https://t.co/qpmTgSJAth amplifies this message to more than 100 government stakeholders with the power to bring about change.Add your voice. Stand with us. Stand for Craft.
ADVERTISING— Dan Sutton (@DSutton1986) September 29, 2021
«The excise tax system as it stands today, since legalization began, eventually imposed a tax on micro-businesses, artisans, and small and medium-sized enterprises ranging from 20 to 30% of their maximum revenue.»
The problem with this, explains Dan Sutton, is that this fixed rate means paying about a quarter—or more—of a company’s revenue on its wholesale cannabis price. «For every dollar they earn, they have to pay thirty points on the flat fee before they receive even a penny.»
Rather than a fixed rate, Dan Sutton would prefer to switch to a percentage of sales.
«If we want an industry which includes small businesses, », «If we want an industry that includes companies not subsidized by millions in shareholder investments, then we need to revise this excise tax now,» Dan Sutton declares. "We need to link the tax to wholesale prices using a floating percentage.".
The Hope of the Movement Craft Booth would be to bring the issue to the forefront, particularly with the federal government, which will begin a mandatory three-year review of legalization in October in order to improve current regulations.
«It’s not that I don’t want to pay taxes,» Sutton said. «I want to pay the right amount of taxes—enough for my business to survive, and enough for us to continue making a significant contribution to the Canadian economy, while still being able to operate like any other business.»
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