High cannabis taxes are having a detrimental impact on the cannabis industry and consumers. Overtaxation is stifling growth at all levels of cannabis business and harming the broader economy in Canada.
FAIR Cannabis, a Canadian advocacy group dedicated to creating a fair and inclusive cannabis landscape, is calling for urgent reforms to the current cannabis taxation framework.
Here are ten reasons why lowering cannabis taxes is essential to building a viable cannabis industry:
Economic Impact: High taxes on cannabis contribute to inflated prices for consumers, reducing affordability and limiting access to legal products. This drives consumers toward the illicit market, undermining the goals of legalization and reducing tax revenue for governments.
Business Viability: Over-taxation squeezes profit margins for cannabis businesses, making it difficult for them to operate sustainably and remain profitable. Many companies, particularly small and medium-sized enterprises, struggle to stay afloat or are forced out of business altogether.
Innovation and Investment: High taxes deter investment in the legal cannabis industry and stifle innovation. Investors are less inclined to commit capital to businesses facing significant financial hurdles due to taxation, limiting growth and innovation within the sector.
Job Losses: The closure of cannabis businesses due to over-taxation results in job losses across the industry, impacting employees, suppliers, and ancillary service providers. This creates ripple effects on local economies and communities.
Social Equity: High taxes disproportionately affect lower-income individuals who already struggle with affordability. This exacerbates socioeconomic disparities and undermines efforts to promote social equity within the cannabis industry.
Market Competitiveness: Excessive taxation puts legal cannabis businesses at a disadvantage compared to illicit operators who do not face the same tax burden. This hampers the ability of legal businesses to compete effectively and erodes their market share.
Consumer Access to Medical Cannabis: High taxes on cannabis pose barriers to access for medical cannabis patients who rely on cannabis for therapeutic purposes. Affordability issues force patients to seek alternatives or forego treatment altogether, compromising their health and well-being.
Public Health and Safety: Excessive taxation perpetuates the existence of the illicit cannabis market, where product quality and safety standards are unregulated. Consumers may turn to these sources to avoid high prices, risking exposure to potentially harmful products.
Legal Compliance: Excessive taxation creates incentives for tax evasion and illicit market activity among businesses and consumers seeking to avoid high taxes. This undermines the goals of regulation and enforcement efforts aimed at ensuring compliance with cannabis laws.
International Competitiveness: Canada's legal cannabis industry competes in a global market, and high taxes put Canadian businesses at a disadvantage compared to competitors in jurisdictions with lower tax rates. This limits the industry's ability to expand exports and capitalize on international opportunities.
FAIR Cannabis urges stakeholders and policymakers to recognize the far-reaching negative consequences of overtaxation on the cannabis industry.
By advocating for a more reasonable and balanced taxation framework, we can support the growth and sustainability of the legal cannabis industry, promote economic prosperity, and ensure equitable access to safe and regulated cannabis products for all Canadians.
Join us in our campaign to lower cannabis taxes and create a more inclusive cannabis landscape in Canada. Together, we can make a difference and pave the way for a brighter future for the cannabis industry and its stakeholders.
For more information, please visit our website at FAIRCannabis.ca or visit our FAIR Cannabis Taxes campaign page.
About FAIR Cannabis:
FAIR Cannabis is an advocacy group dedicated to promoting fair and inclusive cannabis policies in Canada. We aim to create a regulated cannabis market that prioritizes public health, safety, and social equity.