Canadian Government Collects $1.5 Billion in Cannabis Taxes for Fiscal Year 2021-22
The Canadian government collected over 1.5 billion Canadian dollars in cannabis taxes for fiscal year 2021-22, reflecting the industry's significant economic impact
Key Points
- 1Canadian government collected over 1.5 billion CAD in cannabis taxes in 2021-22
- 2Federal duties on cannabis increased by 46% from the previous year
- 3Provincial cannabis sales reached 3.1 billion CAD with 332.3 million CAD in profits
- 4Excessive taxation challenges the financial health of private cannabis companies
- 5Calls for tax policy recalibration to support the industry's sustainability
The Canadian government has reported a significant increase in revenue from cannabis taxes, collecting over 1.5 billion Canadian dollars during the fiscal year 2021-2022. According to recent data released by Statistics Canada, this revenue includes both net income from provincially owned cannabis businesses and various taxes. This substantial figure highlights the growing economic impact of the legal cannabis market in Canada
Since the legalization of adult-use cannabis in 2018, the Canadian government has seen a steady rise in tax revenues from cannabis sales. The federal government alone imposed over a billion Canadian dollars in duties on cannabis products between 2018 and 2022. In the fiscal year 2021-22, the Canada Revenue Agency collected 752.5 million Canadian dollars in duties, marking a 46% increase from the previous year
Provincially, cannabis authorities, which act as wholesalers, recorded sales amounting to 3.1 billion Canadian dollars in the same period. These sales resulted in profits of 332.3 million Canadian dollars for provincial cannabis authorities. The excise taxes collected are largely shared with provinces and territories, which further underscores the collaborative fiscal benefits of the cannabis industry across different governmental levels
Despite the impressive tax revenues, private cannabis companies in Canada face financial difficulties due to what many consider excessive taxation. Federal-licensed cannabis producers owed the Canada Revenue Agency 192.7 million Canadian dollars as of March 2023, a significant increase from the previous year. Industry leaders, such as Dan Sutton, CEO of Tantalus Labs, have called for a recalibration of tax policies to prevent further strain on the industry, particularly for small businesses
Looking ahead, the Canadian government acknowledges the need for policy adjustments to sustain the cannabis industry's growth. While the government recognized the necessity for changes over 18 months ago, decisive action has yet to be taken. The ongoing tax burden continues to challenge the viability of many cannabis businesses, raising concerns about the future health of the industry