By way of MJ Biz
KPMG in Canada has determined to cease offering monetary assertion audit providers to firms within the hashish trade, marking an unimaginable turnaround for an organization that had earned tens of millions from the rising sector.
The accounting agency confirmed the transfer in a press release MJBizDailyciting “excessive threat” in Canada's grownup hashish trade.
“KPMG in Canada is dedicated to offering high-quality audits and sustaining the integrity of our capital markets,” Kevin Dove, nationwide director of exterior communications for KPMG's administration providers, stated through e-mail.
“Given the continuing challenges that hashish growers have confronted, now we have made the choice that this elevated threat now not meets the chance tolerance of our audit observe.”
Reviews Going Concern
Apparently the weed market up there’s a mess. One downside is that producers haven’t paid their taxes and accrued a debt of $273.4 million Canadian {dollars} ($202 million) to the Canada Income Company (CRA) by the tip of 2023 (Supply: “Canada's unpaid hashish taxes rise 72% to almost $300 million CA” in MJBizDaily. This quantity was virtually $150,000 CAD in 2019, as much as $4.4 million in 2020, $16 million in 2021, and $145 million by March 2023. A few of this might not be collected in any respect since 123 hashish firms they exited house in 2023, a three-fold improve from 2022 (Supply: “Canada's Licenses Cancelled, 'Uncollectible' Hashish Taxes Rise” in MJBizDaily).
MBD:
The newest CRA information exhibits that at the least 212 licenses have been canceled between the federal legalization of marijuana in late 2018 and February 29, 2024, with 58% of the cancellations occurring in 2023 alone.
Tanner Stewart, co-founder and CEO of hashish licensee Stewart Farms in New Brunswick, advised the excise tax is a contributing issue to firms exiting the trade.
“On the finish of the day, the excise tax is so extreme that it actually impacts your steadiness sheet from a margin perspective,” he advised MJBizDaily in a telephone interview.
So maybe a clever transfer on KPMG's half to get out now.
KPMG explains its insurance coverage threat evaluation intimately in its 2023 Transparency Report [PDF] and says that they “undertake an annual reassessment of all audit shoppers to determine dangers associated to the continuing affiliation and the mitigation procedures that needs to be put in place.”
“As well as, prospects and engagements are required to be reassessed if there is a sign that there could also be a change within the threat profile,” says the agency.
Learn extra
As soon as Leaders within the Hashish Area, Canuck KPMG decides to desert all its Weed shoppers
