{"id":1420,"date":"2021-09-29T18:59:37","date_gmt":"2021-09-29T18:59:37","guid":{"rendered":"https:\/\/www.leafly.com\/wp-home\/?p=180023"},"modified":"2021-09-29T18:59:37","modified_gmt":"2021-09-29T18:59:37","slug":"craft-growers-are-pushing-for-excise-tax-reform-in-canada","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=1420","title":{"rendered":"Craft growers are pushing for excise tax reform in Canada"},"content":{"rendered":"<p>  <title>Craft growers are pushing for excise tax reform in Canada &#8211; Leafly<\/title>     <!-- This is Index Exchange, a script\/\/3rd-party integration that interjects GAM. It needs to be 'ahead' of GTM in the DOM, which comes from Cephalopod. GTM loads GAM. This script needs to setup it's interjection stuff before GAM loads. --> <!-- End Index Exchange --> <!-- Quotes = strings--><!-- No quotes = boolean-->\t   <!-- This site is optimized with the Yoast SEO Premium plugin v17.1.2 (Yoast SEO v17.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->                  <!-- \/ Yoast SEO Premium plugin. --> <\/p>\n<p> <!-- BEGIN Sailthru Horizon Meta Information --><\/p>\n<p><!-- END Sailthru Horizon Meta Information -->  <!-- Google Publisher Tag --> <!-- End Google Publisher Tag --> <!-- Google Tag Manager --> <!-- End Google Tag Manager --> <!-- Chartbeat --> <!-- End Chartbeat --><br \/>\n <!-- Google Tag Manager (noscript) -->   <!-- End Google Tag Manager (noscript) -->   <title>Leafly<\/title>     <title>Leafly \u00ae<\/title>                                                                                                                                                                                                                                                                                                                                                                                              <title>Loading\u2026<\/title>     <\/p>\n<div class=\"bg-white fixed flex hidden inset-0 items-start md:h-auto md:items-center overflow-auto\" id=\"age-gate-container\">\n<div class=\"bg-white md:h-auto mx-auto p-lg text-sm w-full\" id=\"age-gate\">\n<p><label for=\"select-country\">Where are you from?<\/label><\/p>\n<div class=\"age-gate__info\">\n<p><label for=\"select-province\">Which part of Canada?<\/label><\/p>\n<div class=\"age-gate__age hidden\"><\/div>\n<p class=\"error error--underage hidden\">Darn! You&#8217;re not old enough to use Leafly.<\/p>\n<p class=\"error error--unavailable hidden\">Sorry, Leafly isn&#8217;t available in your location yet.<\/p>\n<\/div>\n<p class=\"hidden age-gate__loading\">Redirecting you to<span class=\"redirect-domain\"><\/span><\/p>\n<p class=\"text-xs mt-auto\">By accessing this site, you accept<br \/>\nthe <a class=\"py-xl\" data-testid=\"tou-link\" href=\"https:\/\/www.leafly.ca\/info\/terms-of-use\">Terms of Use<\/a><br \/>\nand <a class=\"py-xl\" data-testid=\"pp-link\" href=\"https:\/\/www.leafly.ca\/info\/privacy-policy\">Privacy Policy<\/a>.<\/p>\n<\/div>\n<\/div>\n<div class=\"container my-xl\">\n<div class=\"row\">\n<div class=\"col md:col-9\" id=\"article-content\">\n<p>The founder of a cannabis company in BC is trying to bring attention to an issue many in the industry say is threatening to put small cannabis companies out of business.<\/p>\n<p>The current federal excise tax on cannabis doesn\u2019t reflect the realities of the market, according to Dan Sutton, CEO of Tantalus Labs, a cannabis cultivator and processor located about an hour outside of Vancouver.<\/p>\n<p>The main issue? The excise tax is set at a flat $1 per gram rate, rather than a percentage of sales. Instead, Sutton says the tax should be based on scale, similar to how they do it in the beer industry.<\/p>\n<p>Canadian craft cannabis is being taxed to death, according to Sutton. That\u2019s why he is leading the charge with the campaign <a href=\"https:\/\/t.co\/qpmTgSJAth?amp=1\" target=\"_blank\" rel=\"noreferrer noopener\">Stand for Craft<\/a>, where people will be able to learn more about the issue and access literature and ways to contact politicians.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">If you believe that small business deserves its place in the future of Canadian cannabis, we need your voice today.<br \/><a href=\"https:\/\/t.co\/qpmTgSJAth\">https:\/\/t.co\/qpmTgSJAth<\/a> amplifies this message to 100+ government stakeholders with the power to make change.<\/p>\n<p>Add your voice. Stand with us. Stand for Craft.<\/p>\n<p>\u2014 Dan Sutton (@DSutton1986) <a href=\"https:\/\/twitter.com\/DSutton1986\/status\/1443169609792716800?ref_src=twsrc%5Etfw\">September 29, 2021<\/a><\/p><\/blockquote>\n<h2 id=\"h-the-excise-tax-shouldn-t-be-a-flat-rate\">The excise tax shouldn\u2019t be a flat rate<\/h2>\n<p>The excise tax was established when the federal government legalized cannabis. Cannabis companies selling products into the provincial market, or selling to consumers in the medical stream, are required to pay a flat tax rate. <\/p>\n<p>Overlooking some small nuances, it roughly breaks down to $1 per gram of cannabis sold. Seventy-five percent of those taxes go to the provinces, while twenty-five percent goes to the federal government.<\/p>\n<p>That rate was established partly because the federal government saw the average cost of cannabis at the time of legalization as being around $10 per gram.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img width=\"1024\" height=\"628\" alt class=\"wp-image-180060 has-ll lazyload\" data-srcset=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.png,compress&amp;w=550 550w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.png,compress&amp;w=740 740w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.png,compress&amp;w=1100 1100w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.png,compress&amp;w=1480 1480w\"><figcaption>Stand for Craft is a movement that demands tax reform from government officials. (Dan Sutton)<\/figcaption><\/figure>\n<\/div>\n<p>\u201cThe excise tax regime as it exists today, from the beginning of legalization, has ended up taxing micros, craft, and small to medium businesses upwards of 20-30% of their top-line revenue.\u201d <\/p>\n<p>The problem with this, says Sutton, is that this flat rate means paying about a quarter, or more, of a companies revenue on their wholesale price of cannabis. \u201cEvery dollar they make, they have to pay thirty points on the package before they get even a cent.\u201d<\/p>\n<h2 id=\"h-stand-for-craft-wants-tax-based-on-a-percentage-of-sales\">Stand for Craft wants tax based on a percentage of sales<\/h2>\n<p>Rather than a flat rate, Sutton says he\u2019d like to see a move to a number based on the percentage of sales. Paid on the consumer price rather than the wholesale price. <\/p>\n<p>\u201cIf we want an industry that includes small business, if we want an industry that includes firms that are not subsidized by millions in shareholder investments, then we need to revise this excise now,\u201d says Sutton. \u201cWe need to attach taxation to wholesale prices: a floating percent.\u201d<\/p>\n<figure class=\"wp-block-image size-large\"><img width=\"819\" height=\"1024\" alt class=\"wp-image-180089 has-ll lazyload\" data-srcset=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-1.jpg,compress&amp;w=550 550w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-1.jpg,compress&amp;w=740 740w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-1.jpg,compress&amp;w=1100 1100w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-1.jpg,compress&amp;w=1480 1480w\"><figcaption>Close up of Jack Herer grown by Tantalus Labs. (Twitter @tantaluslabs)<\/figcaption><\/figure>\n<p>When a producer\u2019s profit margin is only $2-3 a gram, that $1 excise tax can eat up 20-30% of the company profits. Sutton predicts that as prices continue to drop, it could amount to 50% or more of revenue. <\/p>\n<p>A sales-based sliding scale would still allow governments to bring in revenue but would not squeeze small cannabis businesses to the point of bankruptcy.<\/p>\n<p>\u201cA change is needed to allow those companies to make enough money to perpetuate themselves. Not to get rich quick, not to blow up in an uncontrolled way, but simply to keep the lights on and expand their businesses organically.\u201d<\/p>\n<h2 id=\"h-craft-growers-coast-to-coast-are-joining-the-cause\">Craft growers coast-to-coast are joining the cause<\/h2>\n<p>Sutton and Tantalus are not the only ones feeling the pain. Kieley Beaudry, the owner of Parkland Flower, a micro cultivator and processor in Alberta that sells seeds, flower and pre-rolls into several provinces, also feels the pressure.<\/p>\n<p>Beaudry, who is also the head of the <a href=\"https:\/\/www.craftassociation.ca\/\" target=\"_blank\" rel=\"noreferrer noopener\">Alberta Cannabis Micro License Association<\/a> (ACMLA), says she and the ACMLA are on board to draw more attention to the issue.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">In case y&#8217;all are wondering what Violator Kush looks like when she finishes.<\/p>\n<p>Chop chop next week! <a href=\"https:\/\/twitter.com\/hashtag\/GrowWithUs?src=hash&amp;ref_src=twsrc%5Etfw\">#GrowWithUs<\/a> <a href=\"https:\/\/t.co\/VXsdAlpBGE\">pic.twitter.com\/VXsdAlpBGE<\/a><\/p>\n<p>\u2014 ParklandFlower (@ParklandFlower) <a href=\"https:\/\/twitter.com\/ParklandFlower\/status\/1331670247925895169?ref_src=twsrc%5Etfw\">November 25, 2020<\/a><\/p><\/blockquote>\n<p>\u201cAt the ACMLA, we\u2019re taking up the charge with Dan,\u201d says Beaudry. \u201cA lot of it is putting our voices together as a group. I think that is going to be key.\u201d<\/p>\n<p>She says her focus is primarily on politicians at all levels, helping them understand that this is an issue that affects small businesses in their ridings.<\/p>\n<p>\u201cIt\u2019s about the local politicians\u2014we need to get them behind us. With municipal elections happening now (in Alberta)<em>,<\/em> this is a good time to speak to the candidates and ask what their thoughts are.\u201d<\/p>\n<h2 id=\"h-times-have-changed-the-excise-tax-needs-to-as-well\">Times have changed, the excise tax needs to as well<\/h2>\n<p>\u201cI don\u2019t think the industry is opposed to paying an excise tax, as long as that tax is reasonable, and is able to rapidly adjust to a constantly fluctuating market,\u201d says Tom Ulanowski, VP of quality assurance and regulatory affairs at Nextleaf Labs Ltd. <\/p>\n<p>Ulanowski explains that the excise tax is currently based on pre-legalization era price assumptions. But three years into legalization, the average price of flower and extracts has fallen under those expectations. Rendering the excise tax out of date and in need of a revamp.<\/p>\n<figure class=\"wp-block-image size-large\"><img width=\"819\" height=\"1024\" alt class=\"wp-image-180096 has-ll lazyload\" data-srcset=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-2.jpg,compress&amp;w=550 550w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-2.jpg,compress&amp;w=740 740w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-2.jpg,compress&amp;w=1100 1100w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada-2.jpg,compress&amp;w=1480 1480w\"><figcaption>A canopy of colas standing tall in their flowering bay. (Tantalus Labs)<\/figcaption><\/figure>\n<p>\u201cIt made financial sense at $8-9 a gram wholesale,\u201d says Sutton. \u201cBut that\u2019s not where [the market] has landed. It\u2019s much lower than that, so we need policies to respond to market conditions.\u201d<\/p>\n<p>The hope for the \u2018Stand with Craft\u2019 movement, he says, is to try and push the issue to the forefront\u2014especially with the federal government beginning a mandated three-year review of legalization this October\u2014to try and better shape policy in a positive way.<\/p>\n<p>\u201cIt\u2019s not that I don\u2019t want to pay taxes,\u201d says Sutton. \u201cI want to pay the right amount of taxes. Enough that my business can survive, and enough that we can still make an impactful contribution to the Canadian economy, while still being able to operate as a business.\u201d<\/p>\n<div id=\"author-box\" class=\"p-lg my-xxl bg-white rounded border border-light-grey elevation-low\">\n<div class=\"mb-lg\"> <img decoding=\"async\" src=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.jpg\" alt=\"David Brown's Bio Image\" class=\"lazyload inline-block mr-md rounded-full border border-light-grey\"> <\/p>\n<p>David Brown<\/p>\n<\/p><\/div>\n<p class=\"text-sm\">David Brown has been working in and writing about the cannabis industry in Canada since 2012. He was formerly the Editor in Chief and Communications Director for Lift Cannabis and Lift News, a Senior Policy Advisor for Health Canada&#8217;s cannabis legalization branch, and is the founder of StratCann Services Inc.<\/p>\n<p> <a class=\"text-sm font-bold underline text-green\" href=\"https:\/\/www.leafly.ca\/news\/author\/david-brown\">View David Brown&#8217;s articles<\/a> <\/div>\n<div class=\"leafly-sailthru-signup p-lg my-xl bg-white rounded elevation-low border border-light-grey\">\n<p class=\"text-xs pt-lg\">By submitting this form, you will be subscribed to news and promotional emails from <a href=\"https:\/\/www.leafly.com\">Leafly<\/a> and you agree to Leafly&#8217;s <a href=\"https:\/\/www.leafly.com\/company\/tos\">Terms of Service<\/a> and <a href=\"https:\/\/www.leafly.com\/company\/privacy-policy\">Privacy Policy<\/a>. You can unsubscribe from Leafly email messages anytime.<\/p>\n<\/div><\/div>\n<\/p><\/div>\n<\/div>\n<p> <!-- Chartbeat --> <!-- End Chartbeat -->  <!--\nPerformance optimized by W3 Total Cache. Learn more: https:\/\/www.boldgrid.com\/w3-total-cache\/ Served from: _ @ 2021-09-29 18:01:16 by W3 Total Cache\n--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Craft growers are pushing for excise tax reform in Canada &#8211; Leafly Leafly Leafly \u00ae Loading\u2026 Where are you from? Which part of Canada? Darn! You&#8217;re not old enough to use Leafly. Sorry, Leafly isn&#8217;t available in your location yet. Redirecting you to By accessing this site, you accept the Terms of Use and Privacy Policy. The founder of a cannabis company in BC is trying to bring attention to an issue many in the industry say is threatening to put small cannabis companies out of business. The current federal excise tax on cannabis doesn\u2019t reflect the realities of the&#8230; <\/p>\n","protected":false},"author":1,"featured_media":1421,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-1420","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marijuana_information"],"jetpack_featured_media_url":"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/09\/craft-growers-are-pushing-for-excise-tax-reform-in-canada.jpg","_links":{"self":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/1420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1420"}],"version-history":[{"count":0,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/1420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/media\/1421"}],"wp:attachment":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}