A: BC's Direct Delivery program allows small cannabis producers to sell and deliver their products directly to licensed retailers. However, these producers still have to pay a 15% wholesale mark-up to the LDB as a "Proprietary Fee, which we think is unfair.
A: The BCLDB’s 15% “Proprietary Fee” was introduced along with the Direct Delivery program and, in our opinion, is charged in lieu of the BCLDB’s standard 15% wholesale mark-up. As a result, small growers are allowed to perform the work of a wholesaler but must continue to pay the 15% wholesale mark-up back to the BCLDB in the form of a “Proprietary Fee”.
A: The current excise tax structure for recreational cannabis in Canada (2024) requires licensed producers to pay the higher of a flat-rate duty or an ad valorem duty. For dried or fresh cannabis, the tax is CA$1 per gram or 10% of the product's wholesale price, whichever is greater. For edible cannabis, extracts, and topicals, the tax is $0.0025 per milligram of total THC.
A: The federal House of Commons Standing Committee on Finance is recommending a change to how cannabis excise taxes are applied. The change calls for moving from a rate of $1 per gram or 10% of a producer’s selling price (whichever is higher) to a 10% ad valorem rate.
A: As the global cannabis industry continues to open up, policy makers around the world will be looking to the Canadian market as an example of successful policy or failed policy. Our best producers, processors, and retailers struggling to make ends meet means is a clear indication of failed policy. If regulations don't improve, Canada will lose its leadership position within the emerging global cannabis industry.
Another important consideration is available tax revenue. Excise tax isn't collected on products that are exported to other countries and the export market is now offering better prices than the Canadian market. If policy makers continue to insist on high excise taxes, they may lose access to that tax base sooner than expected.
A: Many of BC's best growers are now finding their best offers outside the Canadian market. As much as they want to supply BC retailers, excise tax and the BCLDB's 15% "Proprietary Fee" mean less money to the growers than they would get selling to their product internationally. If BC's best growers continue to struggle financially, it's fair to assume that they will begin to focus on the international market with fewer and fewer of their products available to local retailers.
A: BC's reputation for cannabis is one that's known around the world. It's taken generations, but we've built something truly special that the culture and the community really seem to value. Where we go from here will largely be decided by policy makers as they indirectly decide which types of businesses will survive. If they want to support an industry of small-batch growers who will continue to build the province's reputation for world class cannabis, this is their opportunity.
Our Recommendations
1. Remove the 15% “Proprietary Fee” for Direct Delivery
BC’s Direct Delivery program was created to benefit small producers by allowing them to sell directly to retailers. Unfortunately, the BC Liquor Distribution Branch (BCLDB) replaced its 15% wholesale markup on these products with a 15% “Proprietary Fee”, undermining any economic benefit to the producer. By eliminating this fee, BC can fulfill the original intent of the Direct Delivery program. This is not just an economic imperative, but a matter of fairness: If we want BC's regulated cannabis industry to be globally recognized, we must support the smaller craft producers who form the backbone of that reputation.
2. Introduce a BC Cannabis Jobs Tax Credit
To date, the BC government has collected more than $400M in cannabis excise tax. Allocate 15% of this income to fund a BC Cannabis Jobs Tax Credit that will let BC’s cannabis industry hire some much-needed help. This reinvestment would bring stability to our industry while creating skilled, stable jobs in rural communities across the province.
3. Publicly Endorse the 10% Ad Valorem Excise Tax
Strong advocacy from the BC government can expedite federal adoption of the Federal House of Commons Standing Committee on Finance’s recommended ad valorem structure—ensuring excise taxes scale with actual prices rather than an outdated assumption. This balanced approach will help keep regulated market prices competitive while encouraging more consumers to shop within regulated markets. Silence from our provincial government will have the opposite effect.
4. Establish a Cannabis Innovation & Agri-Tech Fund
We recommend allocating an additional 10% of the province’s cannabis excise tax income to establish a BC Cannabis Innovation Fund, modeled after Innovate BC Fund. This targeted reinvestment would drive critical innovation in sustainable cultivation, agricultural technology, and manufacturing, positioning BC as a global leader while generating lasting economic growth and quality employment opportunities for communities across the province.
5. Cannabis Manufacturing & Processing Grants
Access to capital for expansion is one of the biggest hurdles for craft producers. Expanding provincial economic development grants and loans to include cannabis cultivation and processing projects would change this. In particular, we recommend utilizing the existing BC Manufacturing Jobs Fund to support licensed cannabis producers who are building or expanding processing facilities, labs, or value-add operations.
6. Remove Farm Status Exemptions
Allow Cannabis farmers to use their cannabis crops to qualify for Farm Classification on ALR land. Removing the "Farm Status" exemption for cannabis means that licensed growers will be able to access the same benefits as other farms, including agricultural property tax rebates and preferred rates (e.g. natural gas, hydro). This includes enabling cannabis farmers to participate in cannabis related agritourism opportunities. This alignment would stimulate rural economies, uphold the integrity of the Agricultural Land Reserve, and support a more balanced, sustainable agricultural sector in British Columbia.
7. Adjust Farm Gate Licensing Fees to Align with Other Agricultural Sectors
A fair and consistent fee structure will support rural businesses and enable BC producers to compete globally and create unique and innovative tourism opportunities. The $7,500 application fee for a cannabis Production Retail Store license is 13x higher than that of a winery, brewery, or cidery.
8. Permit Indoor Consumption within Licensed Production Retail Stores
Despite increasing support for cannabis consumption spaces, current regulations effectively prevent the consumption of cannabis indoors. An exemption for licensed Production Retail Stores would provide licensed producers with a small space where customers could sample and purchase products, just as they would on a tour of a winery or craft brewery.
9. Enforcement of Current Regulations
Increase enforcement of illicit production and sales to ensure their lower costs can’t be used to undercut the regulated market on price with products that are a proven risk to public health. If the proceeds from operating in the unregulated industry continue to exceed that of operating in the regulated industry, the unregulated industry will continue to thrive.
Where does your weed money go?
FAQ
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VICTORIA CANNABIS CO.
VALHALLA FLWR
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WILDCARD EXTRACTS
WOODY NELSON
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Our Mission
British Columbia’s licensed cannabis industry has the potential to be a global leader—anchoring rural economies, creating thousands of stable jobs, and generating significant government revenues. Despite our many advantages, the sector is struggling under excessive taxation, regulatory burdens, and a market price set by unregulated producers.
We're here to represent BC's licensed craft producers and recommend sensible reform to provincial and federal policy makers. Together, we have the potential to unlock our unrealized potential as a global leader in responsible, innovative, high-quality cannabis production.
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Canada's place within the global economy is changing, and how those changes will impact BC's economy remains to be seen. What we do know is that this shift has encouraged policy makers to reconsider the value of BC's regulated cannabis industry and its ability to positively impact our economy.
Our priorities are to help policy makers with a deeper understanding our industry, to make sensible recommendations that benefit all stakeholders, and to give our industry its best chance of becoming everything we know it has the potential to be.
Below, you'll find our current recommendations for the provincial government, ranked by priority.
