In response to industry concerns, the Manitoba government is expected to extend a rebate on their Social Responsibility Fee paid by cannabis stores since 2022, according to one MLA. 

The fee over the last two years would have totalled around $18 million for the province.

The change came following a meeting on May 10 where the Standing Committee on Social and Economic Development discussed Bill 10, which would repeal Manitoba’s six percent Social Responsibility Fee (SRF) charged to retailers. The Bill had originally proposed to repeal the bill effective January 1, 2023. 

In the committee meeting, numerous Manitoba cannabis store representatives discussed their desire to see the fee repealed retroactively to January 1, 2022, effectively giving them their money back. At the time, the committee approved the bill with no amendments, sending it back to the House for third reading.

The amendment was on the orders of the day for May 16 as a report stage amendment but was not discussed. It is expected to be discussed in the coming days.

Part of the industry’s frustration stems from the government admitting that they had not spent the money as intended and that the “social cost” of legalization had been exaggerated. 

When the legislation was first introduced in 2019, Manitoba’s Justice Minister Cliff Cullen said the funding would pay for things like enforcement, as well as addressing the “social cost” of legalization.  

“The social responsibility fee is a key component of our regulatory framework for non-medical cannabis,” Cullen said at the time. “It would be used to protect vulnerable populations, help eliminate the illegal market, and pay for social costs connected to cannabis use. This approach ensures retailers would share in the social costs of public education, safety, health, and addictions.”

Retailers have been paying the fee since June 2022, which has seen them handing over tens, hundreds of thousands, or even millions of dollars. 

News of the change comes from the MLA for St Boniface, Dougald Lamont, who tells StratCann that the provincial government has now made one amendment, backdating the changes effective to January 1, 2022. 

Lamont tells StratCann he’s pleased to see the changes, but is critical of the provincial government for implementing such a high fee on the industry in the first place.

“It shouldn’t take a whole bunch of locally owned Manitoba businesses facing bankruptcy to get action. This was a really dire situation and it should never have gotten this far. Why charge a fee like that and do nothing on social responsibility?”

The Liberal MLA says the government needs to do more to help the industry and ensure more even enforcement of provincial rules. 

“There’s still more work to do to stabilize the legal industry,” he adds. “We have crackdowns on illegal tobacco, but not on cannabis, and the government keeps handing out new business licenses in a market that’s already saturated. We need to act on that next.” 

Ari Glinter, the head of business development and regulatory compliance at The Joint Cannabis, with ten locations in Manitoba, said he’s pleased with the extension of the rebate. 

“We sincerely appreciate everything this provincial government has done to create a financially healthy cannabis industry in Manitoba. This amendment clearly shows that they are willing to hear our feedback and make the necessary changes.”

The bill to repeal the social responsibility fee, Bill 10, The Liquor, Gaming and Cannabis Control Amendment Act (Social Responsibility Fee Repealed), was introduced on Monday, November 28, 2022, by the Minister of Finance, Cameron Friesen, and seconded by the Minister of Indigenous Reconciliation and Northern Relations, Alan Lagimodiere.

Minister Friesen said that repealing the six percent fee is another step the provincial government is taking to help the legal cannabis industry displace the illegal cannabis market in Manitoba. 

“After four years of legalization, the cannabis market is maturing, the regulatory costs to the province are well known, leading to the repealing of the social responsibility fee and the transition to a new taxation regime for the long term,” said Friesen. “Repealing the social responsibility fee will continue to reduce the cannabis cost to consumers looking to switch from the illegal market.”

Local cannabis advocate Steven Stairs from the Cannabis Business Association of Manitoba says the move will benefit every section of the cannabis community in Manitoba.

“From large corporations to small mom and pop operations, cannabis retailers across Manitoba will soon be able to breathe a sigh of relief when it comes to the social responsibility fee,” says Stairs. 

“After years of lobbying the provincial government to repeal the social responsibility fee, the cannabis business association of Manitoba is elated to hear the news that they will be doing such action. This will put back millions upon millions of dollars into the local economy to help support and sustain the growing cannabis industry in Manitoba.”