Citing high excise taxes as a major pain point, Tantalus CEO Dan Sutton delivered a crushing reality check to those following the industry.
“Today there are no consistently profitable cannabis cultivators — big or small — in Canada. Zero,” he told BIV.com.
(In March 2021, Business of Cannabis hosted Sutton for an “Office Hours” session with a no-holds-barred Q&A. Watch the recap.)
Time for tiered taxes?
Sutton said his B.C.-based cultivation business pays more than 25% of its top line revenue in excise taxes, which he suggests could be tiered to create a less punishing system and make it easier to compete with the illicit market.
‘Hot and heavy’ consolidation
The industry is already in flux through heavy consolidation, with new acquisition deals from big money players buying up smaller brands that are resonating with consumers in the market. (See: Tilray/Aphria, Canopy/Supreme, HEXO/48North)
“Consolidation is happening hot and heavy right now,” he said, “and I think it’s certainly going to continue through the end of this year.”
Respect the hustle
We have to hand it to Sutton – who is never shy, always open to talking and leads in the open:
Even while conceding how tough the cannabis cultivation business is and pushing for regulatory change, he managed to both make it known that Tantalus is “a healthy and growing business,” and that he’s entertaining offers.