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The provincial government of Manitoba has recently introduced an amendment aimed at repealing the six per cent social responsibility fee imposed on gross retail cannabis sales.
This decision, if the proposal passes, marks a significant step in Manitoba’s efforts to strengthen the legal cannabis sector while combatting the persistent challenges surrounding the illicit market. By eliminating this financial burden on retailers, government hopes to promote growth, increase competitiveness, and allow cannabis retailers to reinvest in their industry.
Since the legalization of recreational cannabis in Canada in 2018, provinces and territories have explored various regulatory frameworks to ensure a responsible and thriving industry. One such initiative was the introduction of social responsibility fees, which were intended to support public education, harm reduction and other related initiatives.
The proposed amendment seeks to revoke the 6 per cent social responsibility fee on gross retail cannabis sales in Manitoba, a move industry leaders have been lobbying the provincial government to make for some time. The repeal will be retroactive to January 2022, thus waiving the SRFs owed by Manitoba cannabis retailers for 2022 and 2023.
“Cannabis retailers have voiced the need for this type of financial support to invest that capital back into their business, to lower prices, educate the public, create more jobs, and continue to put an end to the illegal market,” said Delta 9 CEO John Arbuthnot about the proposal. “This is a strong demonstration from the Manitoba Conservative Government that they have listened to the concerns of stakeholders and have brought forward swift supports for the cannabis retail sector.”
With the removal of this fee, legal cannabis retailers in Manitoba will have greater financial flexibility at a time when Canada looks to be entering a recession and higher interest rates have made capital more expensive. This could lead to increased investment in a financial climate where investment is usually slowed.
A reduced financial burden on legal retailers will hopefully make their products more competitively priced, so consumers are incentivized to turn away from the illicit market.
Jake Hribljan is a Canadian freelance writer currently residing in the E.U. Twitter: @JakeHCE
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