Cannabis Executives Complain Over Lack of Tax Reform in Canadian Budget… While Making Bank
Top executives from leading cannabis companies in Canada have voiced their dissatisfaction with the absence of proposed tax reforms in the federal budget, despite their thriving personal financial performance in recent fiscal years.
The CEOs of Tilray Brands (TSX: TLRY), Village Farms International Inc. (TSX: VFF), and Canopy Growth Corp. (TSX: WEED) have all lamented the government’s failure to address what they perceive as a flawed excise tax regime that disproportionately burdens legal cannabis businesses.
Tilray Brands CEO Irwin Simon, citing concerns over the current tax structure, stated, “We are disappointed that the Canadian government did not take the opportunity to implement cannabis tax reform in the budget. The current tax structure places an unfair burden on legal cannabis companies and hinders our ability to compete with the illicit market.”
Despite their grievances, financial records reveal substantial earnings for these executives. Simon, for instance, received $15,656,584 in total compensation for the fiscal year 2023.
Similarly, Michael DeGiglio, President and Chief Executive Officer of Village Farms International, expressed disappointment, noting, “We remain focused on working with industry and government to create more favorable tax conditions for the cannabis industry and advance a level playing field for all.”
DeGiglio received $747,416 in total compensation for fiscal year 2022.
David Klein, CEO of Canopy Growth Corp., echoed these sentiments, emphasizing that the firm was “disappointed that the Canadian government missed the opportunity to address the flawed excise tax regime in today’s budget.”
“This oversight signals a lack of commitment to the legal cannabis industry as well as the jobs and economic growth we create. The failure to correct this broken tax regime and to leave other critical issues like potency limits unaddressed will continue to hinder the growth of legal cannabis businesses and compromises consumer access to safe, regulated products,” he expounded.
Klein had total compensation of $6,459,521 in fiscal year 2023.
Nevertheless, the executives’ concerns are backed by concrete data. At least 123 federal cannabis business licenses were either canceled or pending cancellation in 2023 due to uncollected excise tax, indicating a worrying trend within the industry.
Canada’s legal cannabis industry won’t see any relief from excise taxes in the 2024 budget. This comes after two recommendations for tax reform were made to the government, but the budget largely ignores cannabis, mentioning it only once in a 430-page document.
Information for this briefing was found via MJBizDaily and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
