Canada: a new tax on edibles and concentrates but still no review of medical cannabis taxes

The Canadian government has just announced its federal budget for 2019. On the menu: new excise taxes based on total THC content for edibles and concentrates - which to be legalized next October - as well as for derivatives and oils. However, there will be no change in the regime for medical cannabis, which will continue to be taxed in the same way as recreational cannabis.

CFAMM disappointed

We recently wrote an article on the Dont Tax Medicine campaign of the association «Canadians for Fair Access to Medical Marijuana» or CFAMM. CFAMM was protesting federal excise taxes on medical cannabis. Canada's policy is not to tax prescription drugs except for medical cannabis. «When we ask the federal government to 1TP5Don'tTaxMedicines, we mean ALL medicines,» the CFAMM said indignantly.

The campaign aimed to raise awareness of this inconsistency among the public and elected officials in order to have these taxes removed from the 2019 federal budget. Although the campaign continues, this expected first step ended in failure. The excise taxes imposed on medical cannabis remain. «As an organization whose primary goal is the accessibility of medical cannabis, we are extremely disappointed to see taxes on medical cannabis remain in the federal budget,» CFAMM tells us. The association points out that taxes can increase the price of a medical cannabis treatment by as much as a quarter - depending on the province - leading some patients to under-dose or buy on the black market.

«Lobbying, widespread support, media coverage, mobilization on social networks and thousands of emails sent to elected representatives by supporters and patients were clearly not enough to convince the government to remove medical cannabis taxes from the federal budget. This highlights the fact that patients treated with cannabis and their voices are not among its priorities».

A different tax for edibles and concentrates

The pre-budget tax regime remains unchanged for dried cannabis, seeds and cuttings. However, a new tax regime has been introduced for edibles, extracts and derivatives. It will therefore also apply to oils (already legal) which were subject to the old regime. These products will be taxed according to their THC content. CBD is not subject to federal taxes.

The proposed tax rate is $0.01 per milligram of total THC, or 20 cents for a product containing 20% of THC. These taxes will therefore be relatively low compared with those levied on dried cannabis. Dried cannabis is subject to a tax by weight of 1$ per gram or 10% of the selling price, whichever is higher. The result: lower prices, a more practical tax for manufacturers since they only need to check THC content, and an incentive for producers to keep THC levels low. For these reasons, the new tax system has been generally well received.

For CFAMM, on the other hand, although less significant, these taxes remain taxes imposed on patients because they do not differentiate between recreational and medical use. «We believe this ignores the growing evidence supporting the therapeutic use of THC in medicine and continues to stigmatize patients who need it. These approaches show a lack of understanding around the patient experience of medical cannabis and highlights the need for change.».