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Medical Marijuana Users To Be Hit By New Tax


Written by Philippe Murat

Ottawa – 3 October 2018 – Medical marijuana patients are just a few days away from being hit by a new federal excise tax that will come into effect with the legalization of recreational marijuana on 17 October 2018.


This new tax will be applied to both recreational and medical marijuana. It will have a rate of 25 cents per gram of dried marijuana (or its equivalent in derivative products), 25 cents per viable seed and 25 cents per vegetative cannabis plant. Products with less than 0.3% of THC should be exempt.


Ottawa argues that if medical marijuana is not taxed the same way as recreational marijuana, some recreational users will try to obtain it through a prescription.


Jordan Sinclair, Communications Vice President for Canopy Growth, says that imposing a new tax on medical marijuana on these grounds doesn’t make sense. “Doctors are already screening patients who want a prescription for marijuana,” he says.


Canopy Growth, one of Canada’s leading licensed cannabis producers, has announced last June that it will pay the new excise tax on behalf of medical marijuana clients when it comes into effect. “Since the idea of an excise tax was first floated, we thought it would be a burden for our medical marijuana clients. We have also made lobbying efforts to ask the federal government not to proceed with the tax,” explains Mr. Sinclair.


He adds that the company’s track record proves its commitment to accessibility for those who can the least afford this medication. It already offers a 20% reduction on its products to low-income clients. “We intend to pursue business opportunities offered by both recreational and medical marijuana. That being said, we have made a commitment to our medical marijuana clients to ensure they have accessible marijuana. It is a moral obligation. To achieve that we need physicians and pharmacists to be on board and offer products that are fairly priced and free of red tape.” Mr. Sinclair explained.


Hydropothecary, another licensed medical marijuana producer, also stated its commitment to medical marijuana clients, saying the two divisions, medical and recreational, would operate independently. Communications Coordinator Alexandre Poirier says that medical marijuana patients will have access to a totally independent supply from the one made available for recreational use.



                        “The reality today is that about 60% of medical marijuana patients cannot afford a full dose…” 

                     James O’Hara, President and CEO, Canadians for Fair Access to Medical Marijuana (CFAMM).




Canopy Growth’s decision to absorb the tax for its medical marijuana clients is greatly appreciated by Canadians for Fair Access to Medical Marijuana. “I am pleased to see Canopy’s commitment to affordability for Canadian cannabis patients,” says James O’Hara, CFAMM President and CEO.  “Canadian patients face challenges paying for their medication and the government of Canada’s proposal to tax their medicine will make it even more difficult for patients to receive the care they need and deserve. I hope other licensed producers follow Canopy’s leadership and announce similar support for Canadian patients.”


O’Hara appeared in front of a Senate Committee this spring. “Our message was that Cannabis is a medicine like any other medicine and as such… shouldn’t be subject to any tax.”


In September, it was CannTrusts turn to announce that it will pay the excise tax for its low income clients. CannTrust already has a compassionate pricing program in place offering a 30% reduction on medical marijuana products.


However, another licensed producer, Peace Naturals, has had to close its Compassionate pricing program to new enrolments. The following statement can be found on The Peace Natural Project website:


“Effective immediately, our compassionate pricing program is closed to further enrolments. To better serve our existing patients, we are unable to accept any additional applications. All existing applications will be processed. We will also honour applications from anyone whose registration is currently in queue awaiting processing.”


This could mean that some licensed medical marijuana producers won’t be able to pay the excise tax for their medical marijuana patients and have a compassionate pricing program at the same time.


But through all this remains the fear that patients who already have access to compassionate pricing will lose part of their discount to the new tax.


James O’Hara also worries that imposing the excise tax on medical marijuana might drive some patients to the black market. “(Prime Minister) Justin Trudeau’s position all along has been to take the money out of the black market. But if he says that on one hand and on the other he is taxing medical cannabis, then he encourages the wrong behaviour because the reality today is that about 60% of medical marijuana patients cannot afford a full dose.” He explained.


There is also no way to prevent any provincial government to increase its taxation rate on medical marijuana.


Canadians for Fair Access to Medical Marijuana continues lobbying the federal government, hoping it will accept to exempt medical cannabis from the excise tax.