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article imageCanada's new budget proposes tax on quantity of THC in edibles

By Karen Graham     Mar 20, 2019 in Politics
Ottawa - Cannabis edibles, extracts and topicals in Canada will be taxed by THC content rather than by weight, starting in May, according to the new federal budget released yesterday.
In Canada's new federal budget, there is a tweak to cannabis excise taxes for edibles and other extractable products. Specifically, the tax will come to $0.01 per milligram of total THC starting on May 1.
The Liberal government says the new rules are meant to simplify how the taxes are calculated and clear up compliance rules that producers of cannabis oils have encountered. The new tax will apply to both recreational and medicinal cannabis products.
BNN Bloomberg is also suggesting that this is a sign that cannabis isn't generating as much tax revenue as expected after marijuana for recreational use was legalized last year.
The budget reads, “The proposed THC-based rate will help simplify the excise duty calculation for specific cannabis products and ease compliance issues that producers have encountered with respect to cannabis oils. Certain low-THC products (e.g., cannabis oils) will also generally be subject to lower excise duties than before, providing further tax relief for cannabis products typically used by individuals for medical purposes.”
Products that contain cannabidiol (CBD), a non-psychoactive compound in cannabis, and trace amounts of THC, are exempt from the excise tax. This exemption should provide producers with an incentive to increase the variety of CBD-based products coming to market later this year, reports the Ottawa Citizen.
Currently, the excise tax revenues are split between the federal government and the provinces, with the federal government getting 25 percent and the provincial governments getting 75 percent. The new THC-based revenues will be distributed the same way.
More about Canada, Federal budget, THC levels, cannabis edibles, CBD oils
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