CRA Has Written Off $4 Million in Taxes Owed by Cannabis Dealers

A marijuana plant is seen in Vancouver in a file photo. Don Mackinnon/AFP/Getty Images

The Canadian Revenue Agency says it has had to write off millions of dollars in unpaid taxes owed by cannabis dealers.

The information was part of a response to Conservative MP Tako van Popta’s questions about how many in the cannabis industry owed tax, as first reported by Blacklock’s Reporter.

The Canadian Revenue Agency (CRA) responded to the questions in writing in September, and the response was submitted to the House of Commons on Nov. 18.

In it, the CRA said more than $4 million has been lost to cannabis companies that cannot pay the excise tax.

“To effectively manage the volume of outstanding debt, the CRA may administratively deem certain debts as uncollectible when it confirms that all avenues of collection have been pursued and exhausted,” it said in the document. “Since the inception of the Excise Tax on cannabis, and up to September 21, 2024, a total of $4,718,514 has been written off as uncollectible.”

The CRA said all of the cannabis companies with tax debt that needed to be written off were in Ontario.

Popta also asked how many of the dealers with tax debt applied for bankruptcy but CRA said it did not collect that information.

The Cannabis Council of Canada, which represents licensed producers in the industry, said marijuana businesses are over-taxed, and many cannot make it. In Budget 2023, the government said it would allow taxes to be paid quarterly, rather than monthly.

In 2023, the Competition Bureau did a comprehensive review of the industry and said 66 percent of cannabis businesses had not paid the tax.

It also noted the number of businesses in the industry that were behind in tax payments had been increasing since legalization.