How a New Marijuana Tax Could Hurt Canadian Cannabis Companies

Canada is only weeks away from becoming the second country to legalize recreational marijuana, and many people are cheering it on. But a secret tax could dramatically change the industry.

Some Canadian cannabis companies are worried about taxes being levied against the industry. Back in July, Health Canada proposed a series of fees and taxes they wanted to impose on the cannabis industry. The most worrisome proposal was a 2.3 percent tax on all cannabis revenue. The government justified this tax because they believe the cannabis industry should pay for the cost of regulating the new marijuana market.

Cannabis companies say this tax could hurt them, especially in the early months of legalization. They say the government's projections on marijuana sales are optimistic, and the 2.3 percent tax will hurt businesses in the early months when they're trying to get started. This is particularly problematic in Ontario, where retail marijuana stores have been delayed until next April.

Companies aren't saying that a tax isn't necessary. They're willing to pay their fair share, but they think the 2.3 percent tax right away is a little too steep.

The Canadian government says they are willing to adjust the tax, but they've mostly indicated their desire to make it higher, not lower. 

Perhaps the tax will not be a major issue, or it could become an obstacle cannabis companies are forced to endure. Only time will tell.

(h/t Yahoo)

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