Rising insolvency numbers in Canada’s legal cannabis industry have prompted millions of dollars in regulatory relief.
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Taking effect April 1, the new measures will help legal cannabis distributors, wholesalers and retailers, Blacklock’s Reporter reports — resulting in a net savings in the industry of around $42.1 million annually.
“The cannabis industry is facing economic difficulties which threaten a key objective of the Cannabis Act which is to provide for the legal production of cannabis to displace the illegal cannabis market,” read an impact analysis statement from the Department of Health.
“A healthy, well-regulated, diverse and competitive legal industry is a key element of the cannabis framework.”
Licensed entities within the space have long lamented onerous regulatory requirements, threatening the long-term viability of recreational pot in Canada.
“They indicated some requirements could be reduced or eliminated without compromising these objectives and that there would be benefits for both license holders and the government from the reduction in regulatory burden,” the analysis read.
Licensing requirements for research, burdensome security requirements, and advertising reporting are part of the changes coming.
Over 90 cannabis-focused businesses have gone under since 2018’s legalization — including B.C.- based Tricanna Industries Inc. which reported a $1.1 million tax bill as part of their $3.2 million in debts.
According to the CRA, the cannabis industry has seen $4.7 million in tax debt written off as of last September, with $269.8 million owed in taxes.