The number of canceled cannabis business licenses have soared alongside the amount of “uncollectable” excise tax in Canada.
At least 123 federal cannabis business licenses either were canceled or pending cancellation in 2023, according to new data provided to MJBizDaily by the Canada Revenue Agency (CRA).
That figure is almost triple the number of licenses canceled in 2022.
Companies with canceled licenses are unable to cultivate, produce, package or possess non-duty-paid cannabis.
The data paints a picture of an industry facing micro – and macroeconomic challenges.
The latest CRA data shows that at least 212 licenses were canceled between federal marijuana legalization in late 2018 and Feb. 29, 2024, with 58% of the cancellations happening in 2023 alone.
Tanner Stewart, co-founder and CEO of cannabis license holder Stewart Farms in New Brunswick, suggested the excise tax is a contributing factor to companies exiting the industry.
“At the end of the day, the excise tax is so severe that it truly impacts your balance sheet from a margin perspective,” he told MJBizDaily International Editor Matt Lamers.
Read Matt’s story to learn more about this increasingly dire situation in Canada.