How Canada Might Achieve 0% Tax On Cannabis

Bedrocan Canada, a legal Canadian medical marijuana grower and a subsidiary of the publicly traded Canopy Growth Corporation (TSX.V:CGC), recently announced that its license in Canada was renewed, but the real news might be the fight it's putting up to sell medical marijuana without tax.

The company, which also recently dropped prices of its whole flower cannabis strains to just $5 per gram, has created a petition, which it says will be presented before the Canadian parliament soon.

The petition, which follows a letter writing campaign to Canadian politicians, calls for taxes to be removed from medical marijuana completely. The Canada Revenue Agency, a colder, the more northern version of America's IRS, ruled last fall that medical marijuana could be claimed as a medical expense for income tax purposes, but patients are still required to pay provincial and federal sales tax on it.

Curiously, Canada's tax act does exclude medications that are not available "over the counter," but this has not been applied to cannabis, which is only available to those with a valid medical cannabis authorization from their healthcare provider.

In September 2014, National Post reports Canadian Justice Campbell Miller, in a ruling, has already said medical cannabis was "more akin to an over-the-counter drug than a drug acquired by prescription, " so the the petition may be a bit of a long shot.

"We are committed to advocating for patient issues, and ensuring that the patient's voice does not get lost as a framework for non-medical cannabis is established," said Bruce Linton, Chairman and CEO of Canopy Growth. "Our commitment to affordability dates back to May 2014 when we filed a request for review of this rule by the Canada Revenue Agency. This latest petition reflects our ongoing commitment to advance the issue of affordability however we can.

The pro-legalization government of Justin Trudeau, as yet, has not publicly responded to the petition, but they have agreed to respond to petitions presented in the House within 45 days.

h/t National Post, Twitter User @CannabisExperts

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