Medical marijuana users to be slapped with excise tax

Medical marijuana users are preparing themselves for additional taxes once pot becomes legal for recreational use.

Prescription drugs in Canada are not subject to sales taxes, however HST is charged on medicial marijuana. 

In addition to HST, both medicinal and recreational users will also pay an excise tax of $1/gram or 10% of the retail price, whichever is greater.

“About 60% of patients today cannot afford their full dose already, that's even without this tax,” said James O'Hara, President and CEO of  Canadians for Fair Access to Medical Marijuana, on Ottawa Today, adding that many patients who can't afford the full cost of their dose from licensed distributers are already turning to the black market to relieve themselves of added costs.

Excise taxes are charged on spirits, wine, and tobacco products sold in Canada.

“It's definitely a sin tax, because it's normally put onto products like alcohol, tobacco, and other products that the government wants to disincentivize the use of,” O'Hara said.

He asked, “how can we possibly disincentivize the use for the very medicine that patients rely on day in and day out?”

The Trudeau Government has previously stated it is a “flowing issue,” so changes can be made even after legalization to adapt to new realities.

O'Hara said “we are paying tax already today (on medicinal marijuana) which we shouldn't be, and yet the government is establishing another tax, an excise tax.”

Recreational marijuana will be legal starting October 17 of this year.