Cannabis in Canada can be a tricky business. The sheer volume of regulatory measures make it a difficult industry to navigate from every angle including packaging, sales, manufacturing, finance – and tax. It’s soul-crushing to sell a product for say, $200, then watch nearly 25% in excise taxes go right back out as a payment to governments. When launching any CPG product into markets, it is important to have a full grasp of your margins. With cannabis, it’s a make-or-break imperative. The importance of estimating your excise tax burden in advance cannot be understated.
If you’ve seen the Canada Revenue Agency site on cannabis excise and calculations, it’s not the easiest to comprehend. We poked around the internet to see if there were any tools to help estimate liabilities, but couldn’t find anything useful, so we decided to make one.
There are three tabs in this workbook with a separate tab for each of flower, extracts and plants/seeds. Enter the sales price and details of the sale into the cells that are highlighted blue. The estimated excise taxes payable will appear below. Rates differ across many of the provinces so make sure you are putting in the correct sales data for the province you are looking for.
We use it to for determining product pricing, cash forecasting for expected excise payment, and estimating excise cost of sales on revenue for income projections. We hope it makes your day just a little brighter!