Weed a $2.4M loser in Manitoba

Weed a .4M loser in Manitoba

Provincial cannabis wholesaler Manitoba Liquor and Lotteries earned nearly $27 million in cannabis revenue during the 2018-19 fiscal year ended March 31, according to the Crown corporation’s newly-released annual report. But that wasn’t enough to deliver positive net cannabis revenue to the province, which says it lost more than $2.4 million on cannabis during the same period. The government’s total gross profit from cannabis sales, which includes MLL’s wholesale cannabis markups and a six per cent tax on cannabis retailers’ annual revenues called a Social Responsibility Fee, exceeded $5.3 million during the 2018-19 fiscal year according to the province’s latest public accounts. But that profit was outweighed by costs of nearly $7.8 million, including annual costs surpassing $3.6 million and one-time costs totalling more than $4.1 million.   “Manitoba’s experience shows that legalization has not resulted in material revenues,” says the public accounts report released September 26. Without the one-time costs related to cannabis legalization, Manitoba would have reported a profit of nearly $1.7 million from cannabis. Manitoba Finance said those one-time costs included policy development and planning, health and safety considerations, enforcement and policing, public awareness campaigns and training. In a statement, the finance department said it doesn’t know whether cannabis will turn a profit in the 2019-20 fiscal year. “The upcoming legalization of edibles and related products may generate new and different one-time and ongoing costs,” said the statement. “These costs could erode some of the potential gains in revenue.” Legal cannabis in Manitoba is sold by private-sector retailers who may only sell cannabis purchased from MLL. The provincial wholesaler marks up cannabis prices by nine per cent, plus another $0.75 per gram markup that represents the province’s share of the federal cannabis excise tax. (Manitoba is the only province that’s not participating in Ottawa’s cannabis excise tax regime, which imposes a tax of at least $1 on…

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