Cannabis Edibles, Extracts and Topicals & THC Excise Tax Coming To Canadians May 1, 2019
The Canadian Government has released their 2019 budget plan and it encompasses an abundance of changes to the Cannabis Act of October 17, 2018.
New Classes of Cannabis Products
Canada budget 2019 details 3 new classes of cannabis products that will be available later this year:
- Edible Cannabis
- Cannabis Extracts
- Cannabis Topicals
Applying Excise Duty Taxes To Cannabis Products
With the new proposed cannabis products and taxation, the Budget 2019 suggests excise duty will be applied to the 3 new classes (cannabis edibles, cannabis oils, cannabis topicals) as well as cannabis oils, a product line already available to Canadians through licensed dispensaries.
Excise duty is defined in the business dictionary as:
A percentage levied on manufacture, sale, or use of locally produced goods (such as alcoholic drinks or tobacco products)
Business Dictionary
The new excise duties will be applied to the quantity of THC contained in the final product. Higher levels of THC equate to higher levels of tax and visa versa. Note: CBD levels have been left out of the excise tax on cannabis.
No Additional Taxes To Cannabis Seeds and Flowers
Among the additional excise duty comes no changes to the taxation on cannabis seeds and flower products.
Find out where to buy cannabis seeds in Canada from a number of legal and grey area dispensaries.
Proposed Changes Take Effect May 1, 2019
The proposed taxation changes take effect on May 1, 2019.
Detailed in the same Budget 2019 document is the introduction of the 3 new cannabis product classes, cannabis edibles, cannabis extracts and cannabis topics.
We have contacted those associated with Budget 2019 to find out if the May 1, 2019 deadline applies to solely the new taxation, or the launch of new policy for cannabis edibles, topicals and extracts as well.
Changes to Taxation on Canadian Cannabis By Province
In accordance with the Coordinated Cannabis Taxation Agreements (CCTAs)
- 75% of duties to Provincial Governments
- 25% of duties to Federal Governments
- Capped at $100 million annually for the first 2 years
| Province | Federal Rate ($/mg of total THC) | Additional Rate ($/mg of total THC) | Sales Tax Adjustment (%) |
| Alberta | 0.0025 | 0.0075 | 16.8% |
| British Columbia | 0.0025 | 0.0075 | – |
| Manitoba | 0.0025 | N/A | – |
| New Brunswick | 0.0025 | 0.0075 | – |
| Newfoundland and Labrador | 0.0025 | 0.0075 | – |
| Northwest Territories | 0.0025 | 0.0075 | – |
| Nova Scotia | 0.0025 | 0.0075 | – |
| Nunavut | 0.0025 | 0.0075 | 19.3% |
| Ontario | 0.0025 | 0.0075 | 3.9% |
| PEI | 0.0025 | 0.0075 | – |
| Quebec | 0.0025 | 0.0075 | – |
| Saskatchewan | 0.0025 | 0.0075 | 6.45% |
| Yukon | 0.0025 | 0.0075 | – |
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