Manitoba’s legislature passed a bill on Tuesday eliminating the province’s 6 per cent Social Responsibility Fee (SRF) imposed on legal cannabis retailers at the beginning of last year.
The fee was originally intended to help fund public education, health costs and addiction services among other things but government authorities in the province have now made it clear that the funds would be better used elsewhere.
“Pending the passage of Bill 10 and this latest amendment, cannabis retailers will no longer be required to submit SRF assessment payments for the 2023 or 2022 calendar years,” said a bulletin from Manitoba Liquor & Lotteries earlier this month.
Bill 10’s repealing of the fee is expected to return approximately $18 million to cannabis retailers throughout the province. Cannabis companies such as High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA) and Delta 9 Cannabis Inc. (TSX: DN) (OTCQB: DLTNF) have voiced their approval of the move.
“This will help Manitoba’s legal cannabis retailers of all sizes maintain margins while re-investing in their businesses so they can better compete with a well-entrenched illicit market, and I want to thank both the PC and NDP MLAs for their support to pass this legislation,” said Raj Grover, President and CEO of High Tide on Wednesday.
High Tide has a total of 151 locations and owns 10 Canna Cabana stores throughout Manitoba.
“When the social responsibility fee is eliminated, Manitoba will have one of the most competitive pricing programs for cannabis in Canada,” said Delta 9’s CEO John Arbuthnot on May 17.
Delta 9 is a Winnipeg-based distributor that recently started supplying cannabis to the Yukon Territory. The company announced in January that it would be temporarily laying off 40 of its Manitoba workers as part of a cost-cutting initiative.
“This is a strong demonstration from the Manitoba Conservative Government that they have listened to the concerns of stakeholders and have brought forward swift supports for the cannabis retail sector,” added Arbuthnot.
Manitoba was the only Canadian province that implemented the fee, which was originally intended to help mitigate the social costs associated with cannabis legalization. It took effect in January last year but was short-lived.