Canada budget does not include cannabis tax relief, says Alliance Global

Alliance Global Partners says Canadian excise tax relief for the legal cannabis industry was not included in the country’s budget released yesterday. However, the analyst believes it is positioned well for next year’s budget. Excise tax relief could have provided a “needed lifeline” for licensed producers who owed taxes, and without the tax change the likelihood of smaller businesses not being able to continue operating is increased, the analyst tells investors in a research note. Alliance sees larger, tax-paying, operators as the beneficiaries of an accelerated shakeout. The larger players could have a greater chance of increasing share today, with the cost of cash flow relief from tax reform leading to more share of the market tomorrow and greater cash flow benefits, the firm contends. It says Village Farms (VFF), Tilray (TLRY) and Organigram (OGI) are the best positioned.