Canadian News Aug 6, 2020 2:54 PM EST

Trudeau government gives economic relief to booming marijuana business

Statistics Canada reported that the Cannabis industry saw sales increase from $86 million to $186 million, an increase of 116 percent.

Trudeau government gives economic relief to booming marijuana business
Roberto Wakerell-Cruz Montreal, QC
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The Trudeau Cabinet moved forward with pandemic relief to marijuana dispensaries and dealers, despite the industry's growth from 2019-2020, according to Blacklock's Reporter.

The CEO of the Cannabis Council of Canada, George Smitherman, told Cabinet that while sales were strong, the industry was in the early stages of finding its legs.

"There is the potential for growth out there—billions for sure – but you have to remember we're dealing with 75 percent of companies that had no revenue two years ago."

"We're a start-up sector... We are seeing month to month growth, but notwithstanding that we have challenges around profitability and liquidity."

The Cannabis Council was approved for a six-month reprieve on payments of licensing fees which cost up to $23,000—or just 2.3 percent of large retailer's annual income.

"These amendments will support the government's commitment to enable a diverse and competitive legal cannabis industry encompassing small and large players, thus helping Canadians continue to have access to a competitive and dynamic legal cannabis market that is capable of displacing the illegal market," said Cabinet in their statement.

The economic relief will push license fees back to March 31, 2021 with a short term loan which will grant "economic relief" for marijuana dealers to the tune of $3.5 million.

"It's a helpful contribution... It's not nothing, but this benefit is going to be seen at the lower end of the spectrum. Some people would have hoped for an outright suspension in the collection of those fees," said Smitherman.

Statistics Canada reported that the Cannabis industry saw sales increase from $86 million to $186 million, an increase of 116 percent.

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