Small Growers Struggling With Expensive Excise Taxes

As craft weed canada becomes a global industry, the smaller cultivators are fighting for their share of the market. They’re relying on their small-batch focus to create unique strains that attract loyalty from consumers. And they’re finding ways to build their brand without the huge advertising budgets that many mass-produced producers rely on.

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But a few years into legalization, it’s become clear that Canada’s exorbitant excise taxes are killing the little guys. Last week, Tantalus Labs CEO Dan Sutton spelled out the issue in a Twitter thread, calling the tax “the biggest systemic threat” to cannabis growers, and noting that some crafters are paying more in excise taxes than they earn in margins.

In Nelson, a town of 10,000 people whose streets are lined with Victorian houses, the local joke is that every second house is a craft cannabis producer. But if the Nelson-based Nelson Growers Association has its way, that will soon change.

The association is leading a campaign to urge Health Canada to reform the excise tax system, and move away from the $1 per-gram minimum in exchange for a floating percentage, similar to how Canadian beer brewers are taxed. The campaign, called Stand For Craft, says a new four-tiered system that rewards businesses based on scale will help save small- and medium-sized cultivators.

In the meantime, a new designation for craft cannabis has been introduced at the Ontario Cannabis Store (OCS). It is designed to help producers differentiate themselves in a sea of competition in the critical OCS marketplace, and could give a boost to some smaller operators that are struggling with the high expectations of demanding Canadian consumers. The OCS craft designation is available for dried flower and pre-rolls, and requires cultivators to meet strict policies and procedures to qualify for the mark.