Categories: News

Canada’s provincial governments get 75% of cannabis taxation revenue

In a major win for the provincial governments on Monday, the federal government agreed to give the provinces 75% of all cannabis taxation revenues.

Several weeks ago, Canadian premiere Justin Trudeau hinted that the taxation revenue gathered from taxing cannabis sales and such would be evenly split between the federal and provincial governments.

After that he also announced that the federal excise tax on cannabis sales will be 10% on bigger sales, or $1 CAD on smaller purchases.

Provinces rejected the first suggestion for taxation and managed to sign a 2-year agreement with the federal government.

Yesterday, the provinces managed to get a big win and a major share of the tax revenues as they will be getting 75% of the revenues.

The tax revenues will be helping public programs such as setting up the distribution framework for recreational marijuana, regulating the drug, as well costs related to policing and public health.

Federal Finance Minister Bill Morneau announced the sweetened revenue-sharing deal.

Under the agreement, the federal government will keep a 25% share to a maximum of $78m per year. Any additional revenue above will be redistributed to the 13 provinces and territories.

A fixed price of $8 per gram has been brought up on the Monday meeting, which the governments think will be low enough to push out the black market.

Cannabis companies raised $2-billion USD in 2018

Harrison Phillips, vice-president of Viridian Capital Advisors pointed out that most of the capital raises were private placements and bought deals, but some have also been seed investments and Series A and B financings as well over the course of this year.

The largest deal of the year went down when Constellation Brands purchased 9.9% of Canopy Growth early in November for over $245 million.

Phillips said Viridian Capital Advisors expect fundraising and additional market activity “to generally continue at current rates through the first half of 2018.”

Greencamp News

Latest news from the US and Canada cannabis industry.

Published by
Greencamp News