Article by Emma Spears, Daily Hive
Canada will be legalizing adult-use cannabis on October 17 under the Cannabis Act, which will absorb the current medical-use legislation.
This leaves both medical and recreational cannabis subject to an excise tax, which can add upwards of 10% to each sale.
Here’s what you need to know about cannabis taxation, and how it will affect current and future medical consumers.
What is the excise tax, and how does it work?
According to the federal government, “under the taxation framework, a federal excise duty is paid by a licensed cannabis producer when the cannabis products they package are delivered to a purchaser (for example, a provincially authorized distributor/retailer or final consumer).”
The tax is to be charged regardless of whether the cannabis is for recreational or prescription. Often colloquially referred to as “sin tax,” excise taxes are charged in Canada on all alcohol and tobacco sold within the country.
What’s the big deal?
Almost all prescription drugs are zero-rated throughout all of the provinces, meaning they are not subject to GST, HST or PST/QST/RST.
But medical cannabis users pay HST on their pot prescriptions, unlike any other prescription drug in Canada. The excise tax would add an extra 10% of the cost or CAD$1 per gram of cannabis, whichever is higher.