No Tax Relief for Canadian MED Users

Despite months of activism by MED advocates, Canada’s embattled Liberal government will not repeal the country’s federal excise tax on MED. The news came in 2019 budget from a Liberal government rocked by the SNC-Lavalin scandal. CBC National

• Led by Canadians for Fair Access to Medical Marijuana, MED advocates have spent the winter pressuring the government to remove excise taxes from medical cannabis.
• The budget offered no changes in taxation for fresh and dried cannabis, or seeds and seedlings, but introduced excise taxes for the new classes of products expected to become available around Christmas based on the quantity of THC in the final product. Twitter—Solomon Israel, Financial Post
• The budget includes a MED tax credit for products bought in accordance with rules on accessing MED after October 17, 2018. Anna Arneson from the department of finance told me, “For 2019, the Medical Expense Tax Credit provides a non-refundable, 15-per-cent credit on eligible medical expenses in excess of the lesser of $2,352 and 3 per cent of net income. ” Canadians for Fair Access to Medical Marijuana countered, “This works out to under $500 [per] tax return, which is less then 1 month[’s] medication for the average cannabis patient.” Business in Vancouver, Twitter—CFAMM
• Asked to explain the medical reasoning behind taxing THC but not CBD, Arneson said, “The excise duty framework generally applies to cannabis products, whether for medical or non-medical purposes, that contain THC, the primary psychoactive compound of cannabis. However, packaged fresh and dried cannabis and cannabis oils that contain concentrations of no more than 0.3 per cent THC, and consequently have little to no associated psychoactive effects, generally are not subject to the excise duty under the framework. Pharmaceutical products derived from cannabis are also exempt, provided that the cannabis product has a Drug Identification Number and can only be acquired through a prescription.”
• Lawyer Trina Fraser said she could support taxing REC products by THC. But for MED patients, “this must feel like another slap in the face (and Charter violation??) to those using THC to treat nausea, pain, [or] PTSD.” Twitter—Trina Fraser
• Deepak Anand told MJ Biz Daily, ““There are people using high-THC to treat certain conditions, and they need it to manage their conditions. This is going to raise their taxes. […] This is directly going to impact medical users. Now you’re going to get into the total percentage of THC, so I think it’s definitely going to dig deeper into the pockets of medical users.” MJ Biz Daily

• MED activist Sarah Colero noted the tax refund only benefits those who receive tax returns, meaning that for those who live on disability, unemployment, or welfare, the refund “is useless for us, and to be honest, it kind of feels like [they’re] forgetting we exist.” Twitter—Sarah Colero
• The proposed excise duty rate for edibles, extracts, and topicals—of one cent per milligram of total THC—will come into force on May and will apply to existing oil products as well as edibles, extracts, and topicals. Twitter—Solomon Israel
• LPs generally praised the change in excise tax, though they supported MED advocates in continuing to call for an end to taxing prescription medication. CBC Business
• The government predicts it will receive $12B in cannabis excise tax revenue for the current fiscal year. Bloomberg