The Government of Canada announced in a press conference, on Friday, Nov. 10, their proposed taxation framework for cannabis sales. The plan suggests that tax on cannabis products “should not exceed $1.00 per gram, or 10 per cent of the producer’s sale price of a product.”
In addition, the proposed excise duty should be split equally between the federal government and the provinces/territories. This would mean “50 cents per gram of cannabis, or 5 per cent of the producer’s sale price of that product” would go to the federal government and the other 50% would go the provinces/territories.
The proposed duty would apply to all cannabis products that are available for legal sale. This would currently include fresh and dried cannabis, cannabis oils, capsules, sublingual sprays as well as seeds and seedlings for home cultivation.
The government said the tax rate will also apply to the sale of medical cannabis. Bill Blair told the press, on Nov. 10th, the rationale behind this was to avoid diversion of recreational users moving to the medical system to get better rates.
Stakeholder, producers, advocates and medical marijuana patients were angered by this announcement, as this proposed framework will make cannabis the only physician-authorized drug in Canada that will be subject to a sales tax.
Here’s how two leading patient groups responded, in a joint release, to the proposed excise tax on medical cannabis.
“The use of medical cannabis should be recognized in line with all other prescription medications and accordingly exempt from taxation. Patients have a fundamental right to have access to affordable medicine.”
Jonathan Zaid, Founder & Executive Director, CFAMM
“There is an urgent need for investment in medical cannabis research to improve patient care. Today’s announcement misses the opportunity to devote a portion of the excise tax revenues to medical cannabis research.”
Janet Yale, president and CEO, The Arthritis Society
The following are examples of the proposed taxation rate:
One gram of dried cannabis
Pre-duty price: $8.00
Excise duty (per gram): $1.00
60 ml bottle of cannabis oil
Pre-duty price: $130.00
Excise duty (per cent): $13.00
The following links are publication issued by the Department of Finance, Canada, outlining the government’s proposed taxation plans on the sale of cannabis products in Canada.
- Proposed Excise Duty Framework for Cannabis Products
- At a Glance: Cannabis Taxation
- Legislative and Regulatory Proposals Relating to the Taxation of Cannabis
- Explanatory Notes Relating to the Excise Act, 2001, the Excise Tax Act and Related Regulations
The Government of Canada has invited interested individuals and stakeholders to give feedback on their proposed excise duty framework for cannabis products. Written comments should be forwarded by December 7, 2017 to firstname.lastname@example.org.
The federal framework is intended to be in place once legal marijuana for recreational purposes becomes accessible for retail sale, no later than July 2018.
By Marijuana.Ca Staff