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In late June 2023, Tantalus Labs laid off the majority of its approximately 80 employees (including those at a Maple Ridge plant) and has filed a “Notice of Intent for Restructuring” in Federal court.
Tantalus CEO, Dan Sutton, said “Despite continued market success by firms like Tantalus, the regulatory and taxation environment is persistently so burdensome that even today, five years into recreational legalization, free cash flow in the Canadian cannabis industry remains systemically challenged”.
Source: “Tantalus labs future uncertain”, Maple Ridge – Pitt Meadows News, June 28, 2023.
In July 2023, a BC Judge ruled that Tantalus could sell, in bulk, the remainder of its approximately 1.2 tonnes of cannabis flower inventory, after Canada Revenue Agency threatened to destroy it.
In her ruling, Judge Shelly Fitzpatrick, said that the circumstances were unfortunate, arising “somewhat inexplicably from the position of CRA, and CRA’s threat to enter Tantalus’ premises and destroy the inventory and/or its value.”
Source: “BC Judge allows cannabis ‘fire sale’ to stave off CRA destruction threat”, Vancouver Sun, July 27, 2023.
Canada’s licensed cannabis producers have had it tough from the very beginnings of legalization: competing with a thriving illegal market (including illegal online stores), paying burdensome excise taxes, and adhering to the strict rules on THC levels and packaging – rules that don’t apply to illegal sellers.
There is a growing call from Industry stakeholders and watchdogs for Federal assistance and cannabis regulation reforms. In a February 2023 press conference held by Cannabis Council of Canada at Parliament Hill, five Canadian cannabis industry CEOs discussed how high tax rates and strict regulation are making it impossible for the producers and retail stores to survive. The press conference was held in the wake of 800 layoffs at Canopy Growth Corp. – one of the country’s largest cannabis producers.
Get Cannabis Clarity from Thrive Advisors
Thrive Liquor & Cannabis Advisors helps licensed BC cannabis retailers survive in the competitive retail cannabis market. Whether you’re considering opening a cannabis store, or have been in operation for some time, working with our retail cannabis consultants will help your company thrive.
