Quebec cannabis business QcGoldtech, connected to former Montreal police chief Yvan Delorme, owes more than half a million dollars in unpaid taxes, reports The Montreal Journal.
The company allegedly owes $217,000 under the Quebec Sales Tax Act and reportedly failed to return to the state the amounts it collected in sales tax between March and August 2024. The federal government says it is owed nearly $294,000 in unpaid taxes between March 1 and September 30 of this year.
Revenu Québec and the Canada Revenue Agency established a “hypotheque legal”, giving them creditor’s rights against three pieces of property and a facility connected to QcGoldtech, continues the exclusive report.
Delorme was director of the Montreal Police Department from 2005 to 2010 where he worked for nearly thirty years.
The company’s communications manager told the Montreal Journal that with a high excise tax and no financial assistance from the provincial government, its finances “remain a constant challenge.”
The company has a facility in Saint-André-Avellin, a former slaughterhouse, and in Notre-Dame-de-la-Paix. It also operates with an outdoor licence in Saint-Sulpice.
Both facilities offer dozens of jobs in the Petite-Nation region. The SQDC carries several products from QcGoldtech, including dried flower, pre-rolls, and oils.
The last press release posted on the company website was in 2022. It’s currently currently hiring for three positions.
According to recently tabled documents in the House of Commons, $4,718,514 worth of excise tax on cannabis has been written off as uncollectible as of September 21, 2024. All 12 companies with excise tax written off as uncollectible by the CRA are located in Ontario.
The largest amount for a single company’s uncollected excise tax debt is $1,922,621 from April 2024, while the smallest is $136,095 from September 2024. Of the 11 companies listed, seven show a debt incurred in 2024, three from 2023, and one from 2022.
As of January 31, 2024, the federal government says it has collected $3.4 billion ($3,418,794,702) in federal cannabis excise, with nearly $2.7 billion going back to the provinces and territories ($2,659,784,658).
These amounts reflect the CRA’s administration of Cannabis Duty and Information Returns provided by the licensed cultivators, producers, and packagers of cannabis and/or cannabis products on behalf of the federal, provincial, and territorial governments.
Canada’s federal excise tax for dried cannabis flower is effectively $1 per gram, with 75% of this going back to the provinces, and an ad valorem rate of 2.5% of the dutiable amount for the cannabis product. (Other cannabis products are taxed at a flat rate of $0.0025/milligram of total THC).
CCAA filings for cannabis companies have shown significant amounts of unpaid cannabis taxes owed to the Canada Revenue Agency. One recent CCAA listing showed $345,622.38 owed to the CRA. In a recent creditor protection filing, another company showed nearly $5.4 million owed to the CRA for source deductions and excise tax.
According to Insolvency Insider, 47 cannabis-related businesses in Canada have filed for creditor protection (CCAA) since 2019. Another ten have filed for bankruptcy, 13 have filed for receivership, and 21 have filed for a Notice of Intention (NOI) to make a Proposal under the Bankruptcy and Insolvency Act, allowing financially troubled corporations to restructure their affairs.
