Licensed cannabis producers now know what fees they will have to pay with the Oct. 17 cannabis legalization date fast approaching.
Health Canada announced Friday four new fees with the purpose of fully recovering the costs of regulating the cannabis industry.
The fees announced that will take effect Oct. 17 are:
- Application screening fee: recovers the costs associated with screening new licence applications ($3,277 for standard licence applicants and $1,638 for micro and nursery licence applicants);
- Security clearance fee: recovers the costs associated with screening, processing, and issuing or refusing security clearances ($1,654);
- Import/export permit fee: recovers the costs associated with screening, processing, and issuing or refusing to issue an import or export permit for medical or scientific purposes ($610); and,
- Annual regulatory fee: recovers the aggregate costs of administering the cannabis regulatory program that are not covered under any of the other fees (2.3% of cannabis revenue for standard licence holders, or $23,000 if cannabis revenue is less than $1 million, and 1% on the first $1 million of cannabis revenue for micro and nursery licence holders or $2,500 in cases where cannabis revenue is less than $250,000).
Licensed producers of cannabis exclusively for medical purposes will not have to pay the annual regulatory fee.
Health Canada says annual costs include activities such as licensing, public education and program management that the fees are intended to help cover.
The fee regime does not include law enforcement costs.
Health Canada says it is modifying the design of the annual regulatory fee to use revenue data from the previous year to calculate payments, rather than forecast revenue.
A 30-day public consultation was held by Health Canada through online and written submissions and form letters to get public input on an approach to cost recovery to regulate cannabis.
The government says cost recovery will reduce the costs to Canadians, but the Consumer Choice Centre (CCC) says the new fees will just be passed on to consumers.
“Why are they estimating that it will cost over half a billion dollars in expenditure, not including law enforcement costs, to enforce the Cannabis Act?” CCC North American Affairs Manager David Clement said in a statement.
“This raises some serious red flags regarding the overly bureaucratic, and burdensome, framework that has been created in Ottawa. Surely there has to be a way that legalizes cannabis, enacts sensible consumer-focused regulation, without it costing half a billion dollars.”
Health Canada says it expects to recover all regulatory costs by 2021-22 based on the estimated market size and the number of licensed producers.