Marijuana companies owe over a quarter-billion in taxes

The total owed by retailers, wholesalers, and distributors totalled $269.8 million.

Marijuana companies owe over a quarter-billion in taxes
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Marijuana companies owe over a quarter-billion dollars in unpaid taxes, figures show. Among the tax delinquents is an insolvent cannabis company, whose board of paid directors included Yasir Naqvi, the Liberal MP for Ottawa Centre and parliamentary secretary for health.

“There are 290 separate entities that have unpaid cannabis excise duty,” the Canada Revenue Agency wrote in an Inquiry Of Ministry tabled in the Commons.

The total owed by retailers, wholesalers, and distributors totalled $269.8 million, reports Blacklock's Reporter.

Figures were revealed after Conservative MP Rick Perkins asked what the current amount owed to the government for unpaid excise taxes on cannabis was.

Delinquent companies were not named, including Eve & Co, an Ontario-based company that appointed MP Naqvi as a director.

The MP earned income from the company before it shut down shop in 2022, ethics filings show.

He joined Eve & Co in 2020, two years after losing his seat in the Ontario legislature.

The company filed for bankruptcy protection in March of 2022, records show. The company owed the Canada Revenue Agency $1.9 million including $1.4 million in unpaid excise tax and an additional $267,932 in GST and $206,660 in unremitted Canada Pension Plan payments.

Eve & Co's largest creditor, Royal Bank, owed a $19 million mortgage on “one of the largest cultivation and processing facilities in the world at one million square feet,” court filings show.

In 2023, the Competition Bureau estimated that two-thirds of licensed marijuana dealers nationwide were tax delinquents. “The total amount of unpaid cannabis excise duties has continuously been rising since legalization,” stated a report titled Planting The Seeds For Competition. “Sixty-six percent of licensees required to remit excise duties had an outstanding debt with the Canada Revenue Agency.”

Parliament legalized marijuana in 2018, imposing a tax of $1 per gram plus GST. “With the average price per gram for dried cannabis falling since legalization, excise duties now take up a more significant portion of cannabis producers’ revenues."

“Until recently cannabis producers licensed under the excise duty regime were required to remit excise duties to the Canada Revenue Agency monthly,” wrote the Competition Bureau. “Many cannabis producers found this challenging as not all cannabis buyers pay for products on a monthly basis.”

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