Cannabis annual fee payment deadline extended

Summary#

The federal government made the Order Amending the Cannabis Fees Order (Extension of Deadline for Payment of 2020–2021 Annual Fee). It pushes the due date for most cannabis annual fees from September 30, 2020 to March 31, 2021, and corrects a wording mistake in the French text of the fee rules. The order was registered on July 23, 2020 and published in the Canada Gazette on August 5, 2020.

What it does#

• Delays payment of the 2020–2021 annual cannabis licence fee for most licence holders from September 30, 2020 to March 31, 2021.
• Keeps the original deadline for licence holders who are in their entry year (their first partial year); those holders still pay by September 30, 2020.
• Fixes a missing phrase in the French version of section 9 of the Cannabis Fees Order so the accounting standards wording matches the English version.
• Comes into force on the day it was registered (July 23, 2020).

Who's affected#

• Cannabis businesses with federal licences that pay the annual fee — about more than 300 licence holders are expected to be affected.
• New licence holders in their entry year are not covered by the deferral and must still pay by September 30, 2020.
• Health Canada will administer the change and handle communications and system updates.
• The federal government’s finances are affected because the deferral shifts when money is received and carries an estimated cost to the government.

Why it matters#

• The deferral gives licensed cannabis businesses short-term cash relief during the economic strain caused by COVID‑19. That can help with rent, wages or other urgent costs between September and March.
• It is meant to support the legal cannabis market and help it compete with the illegal market by preserving business continuity.
• The government expects a benefit of about $0.8 million in interest during the deferral but estimates the deferral will cost the federal government about $3.5 million (mostly from the lost use of funds and possible defaults).
• The change is narrow and temporary: it shifts a payment date and corrects wording in the French rules. If any broader or longer relief is desired, that would require further action.