Inclusion of medical marijuana in government’s tax plan for cannabis criticized

The new tax framework for cannabis products will include medical marijuana, according to the proposed excise duty framework published by the federal government on Friday.

Advocates for medical marijuana, including Canadians for Fair Access to Medical Marijuana and the Arthritis Society, have stated that while they recognize and welcome continued consultations, they believe the plan hurts patients. “Applying any tax to medically prescribed cannabis is inconsistent with the taxation of prescription medicines, which are tax exempt,” the organizations said in a joint statement.

Read: Key questions for plan sponsors as marijuana legalization approaches

They also expressed concern about a growing affordability issue, due to what they call “severely limited insurance coverage” and the application of sales tax, noting some patients had to switch to less expensive alternatives, such as opioids, that come with significant side-effects.

“The use of medical cannabis should be recognized in line with all other prescription medications and accordingly exempt from taxation. Patients have a fundamental right to have access to affordable medicine,” said Jonathan Zaid, the group’s founder and executive director, in a statement.

The government is proposing a tax rate of one dollar per gram or 10 per cent of the sale price of a packaged cannabis product, whichever is greater, at the outset of legalization. The new excise duty will cover all cannabis, both fresh and dried, as well as oils, seeds and seedlings used for growing at home.

Read: New Ontario rules to include workplace ban on recreational, medical pot

The proposed framework states that any cannabis products sold for medical purposes will be subject to the duty rates and conditions of the excise duty framework. As licensed producers ramp up production in advance of legalization next year, duty will be payable on any products they’ve shipped out ahead of the date cannabis becomes legal, except for cannabis delivered directly to final consumers through the access to cannabis to medical purposes regulations.

The proposed framework is open for consultation until Dec. 7, 2017.

Read: CLHIA warns high prices for recreational marijuana will push users to medical system