Cannabis companies get fees extension from feds

Cannabis. (Black Press Media File).

OTTAWA — Cannabis companies are being given six extra months to pay off annual fees they owe the federal government, which says it’s changing the deadline because of COVID-19.

The government says companies now have until March 31, 2021, to pay the annual fee meant to recover aggregate costs associated with regulating cannabis.

The fee is based on a percentage of each licence holder’s cannabis revenues and was initially due Sept. 30, 2020, for many companies.

The government says it moved the deadline because the cannabis industry has raised concerns about economic difficulties caused by COVID-19.

The annual fee is separate from money collected for application screenings, security clearances and the import or export permits, but represents about 80 per cent of the fees paid by licence holders every year.

The government says the deferral will cost it about $3.5 million because it will lose a chance to make use of that money during the extended deadline period and faces the risk of cannabis companies defaulting on the cash if they become insolvent or file for creditor protection.

This report by The Canadian Press was first published Aug. 5, 2020.