THE Island’s fledgling cannabis industry is yet to generate substantial tax revenue due to “high upfront costs”, the Treasury Minister has said.
Deputy Elaine Millar outlined the challenges faced by the new and developing cannabis sector and defended the current tax framework in response to questions from Deputy Philip Ozouf in the Chamber this week.
She said: “The government and Revenue Jersey are monitoring this nascent industry closely to ensure that tax treatment of its profits and gains remains appropriate.”
Deputy Millar continued: “In line with this, fewer than 12 companies who identified they received income in 2022 as a licensed cannabis cultivator had a positive tax liability for that year.
“As a matter of policy, the controller will not specify numbers of taxpayers below 12, nor the amounts payable at this stage to avoid inadvertent breaches of taxpayer confidentiality.
“As we have only received one year of tax returns from this industry, it would be premature to review the tax regime at this stage.”
The Treasury Minister also explained that cannabis businesses involved in cultivation, processing, or distribution are taxed at 20%, while dispensaries operating as retailers fall under Jersey’s 0% corporate tax regime.
General practitioners, who issue prescriptions, are taxed individually on their profits.
The discussion was had against a backdrop of stalled strategic development for Jersey’s cannabis sector, after then-Economic Development Minister Lyndon Farnham told a 2019 Toronto conference of Jersey’s vision to sit at the “forefront of the emerging European cannabis market”.
Despite earlier ambitions to position the Island as a leader in the European cannabis market, resource constraints halted the creation of a dedicated industry strategy in September.
Since 2019, over £100,000 has been spent on consultancy services and regulatory support, but Economic Development Minister Kirsten Morel said last year that the cannabis industry had brought up to £60m of inward investment to Jersey.
