Canada’s recreational marijuana tax plan gets mixed reviews

Licensed producers of marijuana in Canada say the proposed federal tax regime leaves enough room for the recreational sector to compete with the black market and generate “meaningful profits” come legalization next summer.

The tax would not apply to medical marijuana exports, which could be a boon for Canadian producers hoping to capitalize on international markets coming online in the coming years.

The excise tax, however, would apply to medical marijuana, which has caused consternation among patient groups and licensed producers.

Ottawa is proposing an excise tax of 1 Canadian dollar (88 cents) per gram, or 10 per cent of the final retail price, whichever is greater. That’s on top of the federal sales tax rate of 5%.

What you need to know:

  • The proposal to split excise tax revenue evenly between the federal and provincial governments is not sitting well with premiers, who say they bear a higher financial burden in legalizing marijuana.
  • The excise tax would be in addition to sales taxes applied by federal, provincial and territorial governments.
  • Alberta could be home to the cheapest recreational marijuana in Canada because the province has no sales tax.
  • The proposed tax scheme will be available for public comment until Dec. 7

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