Canada’s cannabis producers are seeking tax relief from Ottawa.
The Canadian cannabis industry is asking the federal government for relief in paying regulatory fees in order to help distressed producers survive the current economic downturn caused by lock down measures prompted by the coronavirus pandemic.
Industry lobby group The National Cannabis Working Group has asked the Canadian government to excuse a regulatory fee payment — which is equal to 2.3% of a pot company’s annual revenue — over the next three fiscal quarters to help support a post-COVID recovery for cannabis firms.
“For legalization to succeed the regulated cannabis sector needs assistance through this extraordinary period — without these companies, there will not be a legal supply of cannabis in Canada and the illegal market will flourish,” the group said in a written statement.
Canadian cannabis companies paid the government $3.6 million in regulatory payments in fiscal 2019, which ended in March 2019, according to the federal government. While that amount may not seem like much relative to what some of the largest cannabis companies earn, it may mean the difference between keeping the lights on or filing for creditor protection, said The National Cannabis Working Group.
The Department of Finance in Ottawa said last month that it is considering providing relief to the cannabis sector. However, the Canadian government did not immediately comment on the industry group’s latest request.