Canada sales Agency has fined cannabis businesses CA$1.3 million since adult-use market launch

Canada Revenue Agency cannabis fines, Canada Revenue Agency has fined cannabis firms CA$1.3 million since adult-use market launch

The Canada Revenue Agency (CRA) has released fines that are cannabis-related 1.3 million Canadian dollars ($1 million) since adult-use marijuana was legalized in October 2018, Marijuana Business Daily has learned.

The nearly two-dozen penalties for violations of the Excise Act include one large levy of approximately CA$500,000, according to the CRA, which collects taxes and administers tax law for the government that is canadian

The hefty penalties came once the nation’s cannabis that are top, Health Canada, has so far chosen not to fine any marijuana producers despite serious regulatory violations such as illegal cultivation and sale.

Instead, the agency has used a variety of other approaches including warnings and license suspensions.

In the case of the CRA, the most reasons that are common evaluating a penalty had been:

  • Production without an excise license.
  • Unaccounted for excise stamps.
  • Inadequate publications and records.
  • The purchase of cannabis by an excise licensee from an person that is unlicensed

The CRA would not reveal the names of the companies, citing confidentiality.

The agency also declined to break the fines down by category because that “could induce the possible recognition of taxpayers, which will contravene the privacy conditions for the Excise Act,” a spokesperson told MJBizDaily.

The CRA accounts for administering the excise taxation framework on cannabis items.

Canada’s Excise Act contains administrative-penalty that is various in cases where businesses are found to have contravened the law.

Fines, or administrative monetary penalties, may be imposed when the Act is found to have been violated, the CRA said.

CRA fines

According to data shared with MJBiDaily, no penalties that are cannabis-related examined in 2018 – the season Canada legalized adult-use cannabis.

In 2019, the initial full calendar 12 months of leisure cannabis product sales in Canada, 15 charges had been examined, totaling CA$769,426.

The biggest fine levied that year had been CA$507,660.

That means the penalty that is average the 14 other contraventions was CA$18,697.

Seven Penalties were assessed in 2020, totaling CA$527,798.

The largest fine in 2020 was for CA$434,611.

Excluding the fine that is largest, the typical penalty for the six other contraventions in 2020 ended up being CA$15,531.

Seemingly tiny infractions such as for instance destroyed stamps that are excise carry significant fines, as those penalties are assessed for every stamp that cannot be accounted for.

No Health Canada fines

The CRA’s fines mark a approach that is different Wellness Canada in terms of regulatory enforcement.

Rather Than fining large businesses, Health Canada has used a combination of warning letters, phone calls and license suspensions, according to the department’s compliance report that is latest for the 2018-19 fiscal year.The compliance report – the first to cover the early months of legalization in Canada – does not show any fines having been issued.“To date, Health Canada has not issued an (administrative monetary penalty),” a department spokesperson previously told



“In the vast majority of cases, regulated parties undertake voluntarily action to correct non-compliance she continued.

“In once they are made aware of the regulatory requirement(s Other cases, other enforcement tools, such as a warning letters, license revocation or suspension, are determined to be most effective for the circumstance.”

Health Canada versus CRA

Shane Morris of Ottawa-based Morris and Associates Consulting questions why the CRA is businesses that are fining wellness Canada has plumped for to not.

“At the conclusion for the time, the minister can determine when you should act so when to not simply take action,” he said in a phone interview.

“But it is interesting to possess two divisions managing the industry that is same take different approaches to the regulatory tools they have and how they apply them.”

Morris expects license holders to be more careful about handling their responsibilities under the CRA’s requirements, as opposed to Health Canada’s requirements, “because that’s where the real potential monetary risk is.”

“You’re seeing, with the number and size of fines from the CRA in the cannabis space, is it.“We that they clearly have a different approach to enforcement and compliance promotion than Health Canada, who have a softer approach, by the looks of recognize this because there were lots of serious events that are noncompliance the industry from Health Canada’s perspective and remit, and yet they have not issued any administrative penalties.[email protected]“It would be interesting to see when they will start fines that are applying and for just what explanation.”

Matt Lamers is (*)Marijuana Business Daily(*)’s worldwide editor, based near Toronto. They can be reached at (*).(*)

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