Cannabis bits: Ontario doubles retail, Aleafia doubles products, Harborside doubles-down on taxes
News out of Ontario shows that the province is hoping to combat the cannabis store shortage by doubling Retail Store Authorizations. The Alcohol and Gaming Commission of Ontario announced earlier this month that it wants to double the pace of cannabis Retail Store Authorizations from 20 to 40 per month. Yesterday, the agency noted that it would double its efforts, going from issuing five RSA’s per week to 10.
According to a report in Marijuana Business Daily, the move will alleviate the problem in Ontario, but it may be years before they catch up to other provinces in Canada.
“As of Monday, 173 cannabis retailers were open in Ontario, or about 1.19 stores per 100,000 people, which is the second-lowest in the country,” wrote Marijuana Business Daily.
“By comparison, Alberta leads with more than 500 store licensees serving a population roughly one-third that of Ontario’s – about 11.5 licenses issued per 100,000 people,” the site continued.
At their current rate, it will take Ontario more than three years to catch up with Alberta, and its current per-100,000 cannabis stores figure.
Aleafia Health launches cannabis 2.0 portfolio
Aleafia Health Inc. (TSX: AH, OTC: ALEAF) announced the launch and release of 510 vape cartridges, which the company is calling the first product in its cannabis 2.0 portfolio. The newly expanded portfolio of offerings from Aleafia includes the cartridges, which are inspired by Aleafia Health’s signature cultivars and sublingual strips, which feature a rapid onset time. The company will also offer consumers confectionary edibles and expanded dried flower products.
“This is an important milestone which represents just the first step in our entering the adult-use market in a meaningful way, while strengthening our expanding medical cannabis market share. We look forward to an exciting sequence of product launches in the months ahead, as we continue to bring new innovative formats to market, while expanding our core portfolio,” said Aleafia Health CEO Geoffrey Benic in a statement.
Cannabis company owes $11 million in taxes
According to an article in WeedWeek, the IRS asked an appeals court to dismiss a cannabis company’s 280E appeal on their taxes. California’s Harborside Health Center took $11 million in deductions between 2007 and 2012. However, because cannabis is considered a Schedule I drug under the Controlled Substances Act, those deductions were technically illegal. The IRS asked the court to dismiss the company’s appeal.
In a brief, government attorneys for the IRS noted that Harborside should have made their issues known in Tax Court. The IRS stated that Harborside’s complaints are rarely if ever heard on appeal.
“Even if these arguments were properly before this court, they lack merit and should be rejected,” read the response from the government.
The National Cannabis Industry Association supported harborside’s appeal. Jim Marty, a Colorado-based CPA not involved with the case, didn’t tell WeedWeek whether or not he thought Harborside could win, but he did think it wasn’t the last time a cannabis company would take the IRS to court.
“The IRS believes in 280E, and there’s people in the Treasury who are concerned about the loss of revenue should 280E be overturned,” he said to WeedWeek. “The problem with that is many cannabis companies can’t afford to pay their taxes. The government, the IRS is really not collecting a lot of money. They’re assessing a lot of taxes, but they’re not actually collecting the money because these small cannabis businesses can’t pay the tax.”