Proper accounting and tracking of sales taxes are essential in the cannabis industry due to the multiple transactions involved between producers, distributors, and consumers. Charging and remitting GST/HST and Provincial Sales Tax on products and services is standard practice to ensure compliance with tax regulations. Failure to manage sales taxes correctly can lead to arrears and potential legal issues.
In addition to sales taxes, companies in the cannabis industry are also required to pay excise duties. Excise duties come into effect when marijuana products are delivered to purchasers, and specific guidelines must be followed for proper reporting and compliance. Adhering to these tax requirements is crucial for the smooth operation of cannabis businesses and to avoid any potential penalties or financial implications.