Tax-Free Weed, Yo! Manitoba’s Got a Fresh Plan to Battle the Underground Scene

Tax-Free Weed, Yo! Manitoba's Got a Fresh Plan to Battle the Underground Scene

Yo, what’s up, it’s your boy Dan, and I got some news for all my fellow cannabis enthusiasts out there. Manitoba is making moves to help out the legal weed industry by getting rid of a 6% “social responsibility tax” that merchants had to pay based on their total sales. This could put around $7.8 million Canadian dollars back into the pockets of businesses that have been struggling to compete in this market.

Last year, the province made over 181 million Canadian dollars from selling regulated cannabis, but there are only about 178 stores open right now. That’s a lot of competition for businesses that are already dealing with low-profit margins. So, getting rid of this tax is a big deal for them.

Raj Grover, the CEO of retailer High Tide, said in a statement that this move will help businesses of all sizes maintain their margins and reinvest in their companies to better compete with the underground market. But we need more than just this one change to make sure the legal weed industry can keep growing and creating jobs while still protecting public health.

Grover is calling on other provinces and the federal government to follow Manitoba’s lead and make more real steps towards supporting this industry. And he’s not wrong – we need bigger changes if we want this industry to thrive.

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The good news is that Ontario has already announced they’re reducing the markup on cannabis edibles and vapes, which should generate an additional 60 million Canadian dollars for the industry annually. But we need even more changes than that if we want to see real progress.

Manitoba is also exploring the idea of partnering up with the federal excise tax system, which is already in place. This means that they would get a share of the tax revenue collected on cannabis sales. But this is still just an idea at this point, so we’ll have to wait and see what happens.

As for the social responsibility tax, it was originally introduced in 2018 as a way to help offset the costs associated with legalizing cannabis, like education, enforcement, and public health. But it’s been causing problems for businesses ever since.

Cannabis advocate Steven Stairs, who represents the Cannabis Business Association of Manitoba, says that retailers are required to make a lump sum payment during the summer that can range from $50,000 to $75,000 for some stores. This is on top of all their other expenses, and it’s made things really difficult for smaller businesses to stay open.

Tom Doran, the owner of Winnipeg’s Jupiter Cannabis store on Academy Road, says that eliminating this tax could be the difference between staying open and shutting down. Smaller businesses are struggling because there are no limits on how many stores can be open or how close they can be to each other. And bigger businesses can undercut prices, which makes it even harder for smaller ones to compete.

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Eliminating this tax would level the playing field and give smaller businesses a fighting chance. And it would help the provincial government avoid any legal issues down the road.

Overall, this is a step in the right direction for Manitoba’s legal cannabis industry. But we need more than just this one change if we want to see real progress. It’s time for governments at all levels to start taking this industry seriously and supporting its growth and job creation while still protecting public health.

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