Canada Doubles Down On Medical Marijuana Tax But Exempts Certain Products

The Canadian government’s 2018 budget just came out, and cannabis is all over it. The word can be found more than a dozen times in the budget released on Monday.

There are no shocking surprises in the budget when it comes to cannabis. The government already announced that all cannabis sold in the country would have a 10 percent excise tax baked into the price of cannabis that manufacturers would have to pay. The revenue from that tax will be divided between provinces and the federal government in a 75-25 split. In the budget, the government did not back down, saying that it was necessary to put an excise tax on all cannabis, in order “to keep cannabis out of the hands of youth and profits out of the hands of criminals.”

One new olive branch that the government extended in its Budget was a provision to allow an excise tax exemption for “low-THC cannabidiol [CBD] oils, which are sometimes used with children facing certain medical conditions.”

In addition, the government added that cannabis-based pharmaceutical formulations that have a Drug Identification Number (DIN) would also be exempt – though every other non-cannabis pharmaceutical drug with a DIN is currently not subject to an excise duty, so it wasn’t too hard for the government to promise something that is already in place.

One curious part of the budget included the examination of options to establish a rebate program “to retroactively reimburse Canadians an amount in recognition of the federal portion of the proposed excise duty that was imposed on equivalent products prior to them being given a Drug Identification Number.”

Since no dried cannabis or cannabis oils sold in the country have a DIN, it’s unclear if this exemption would apply to those products or merely cannabis-based pharmaceutical preparations that are in the midst of obtaining their DIN.

Advocates Outraged By Medical Marijuana Tax

The provinces and territories might be happy with the tax scheme, but The Canadian for Fair Access to Medical Marijuana was furious at the government’s decision to continue taxing many forms of medical marijuana. Members of the patient advocacy organization said they were "outraged" that Finance Minister Bill Morneau doubled-down on his taxation of medical cannabis and only exempted low-THC high-CBD cannabis oil – as if THC did not have medicinal properties.

Mandy McKnight, an advocate whose child suffers from a seizure disorder that is treated with cannabis -  took to Twitter, exclaiming that her son’s medical cannabis would be taxed, while “other children with the same diagnosis and use other pharmaceuticals are not taxed.” She added, “Is that what you mean by fair and equal? How will my son and our family succeeds sir? It’s simple – we won’t.”

While her son does use cannabidiol oil, McKnight says that he also relies on THC-laden cannabis to help coax him out of seizures – a cannabis product that will be subject to excise tax.

The government hopes to collect $8 million in 2017-2018, $13 million in 2018-2019, and approximately $24 million annually by 2012-20122.

The budget also contains funds for public education, and targeted investments to the Mental Health Commission of Canada and the Canadian Centre on Substance Use and Addition, in order to research and communicate about the harms of cannabis.

The budget did not address sales tax – another tax that the government has said will apply to both medical and non-medical cannabis sold in the country. That fight is not over, and we’ll likely see CFAMM and Mandy McKnight continue to speak their mind to the government.


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