The Case Against Taxing Medical Cannabis

Article by Greg Engel, Policy Opinions

The case against taxing medical cannabis

In 2015, research funded by the University of British Columbia Institute for Healthy Living and Chronic Disease Prevention found more than half of respondents who use cannabis for medical purposes reported that they can never or only sometimes afford to buy enough cannabis to relieve their symptoms, and a third of respondents stated that they often or always have to choose between medical cannabis and other life necessities, such as food, rent and other medicines.

At the time, patient advocates across the country spoke passionately about the unfair financial burden medical cannabis patients bear, in part because the drug is subject to sales tax. Licensed producers and patient associations alike argued that, as a drug therapy acquired only through authorization by a qualified health care practitioner and not available over the counter, medical cannabis should be treated like other prescription drugs and be exempt from sales tax.

So why, more than two years later, are we still mired in this debate?

What’s more, the federal government is reviewing a recommendation that may have additional cost implications for patients: to require all cannabis products removed from a federal licensee to carry excise stamps indicating that the appropriate taxes have been paid, like those attached to tobacco packaging. The approach is outdated, costly and overly complex, and the alcohol industry moved away from it years ago, now administering any required controls through a far more efficient reporting process.

It is somewhat confounding to find ourselves about to launch one of the most dynamic new industries in the world and yet still anchored to obsolete ideas of medicine and state control.

In Canada, all prescription products are exempt from tax. Medical cannabis, authorized by a medical document that even the Ontario College of Physicians refers to as a “prescription,” should be no different. To do otherwise is not only to disadvantage many Canadian patients but also to prey upon their vulnerability and demonstrated medical need.

It is true that the introduction of a legal, recreational cannabis market for adult use has complicated matters. The Task Force on Cannabis Legalization and Regulation warned us to be diligent, and to be careful not to tempt Canadians, through the waiving of taxes, to exploit the medical cannabis system for recreational purposes. Policies based on fear and suspicion are rarely as effective as we hope; treating medical cannabis like its prescription peers, however, actually could have significant shared benefit.

We know, for instance, that Canada is in the throes of an opioid use epidemic. Opioid-related overdoses were responsible for more than 2,800 deaths in Canada in 2016. We also know that clinical evidence supporting the use of cannabis as an effective harm reduction strategy is quickly mounting. As medical cannabis continues to displace prescription drugs and other illicit substances, helping reduce the health burden of their problematic use, should the Department of Finance Canada not be consistent in how it treats these products?

Taken a step further, what physicians and regulators should be concerned about is not attracting but rather alienating the patient consumer base. Today, the majority of our company’s new medical cannabis patients are prescribed cannabis that is high in cannabidiol (CBD, the non-psychoactive component of cannabis) and low in tetrahydrocannabinol (THC, the chemical compound in cannabis responsible for a euphoric high).

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