Canada plans to introduce tax on cannabis
According to a recently released report from Marijuana Business Daily titled “Marijuana Business Factbook 2017,” the U.S. legal cannabis industry is expected to grow by about 30% in 2017, 45% the following year, and an aggregate of 300% between 2016 and 2021. Overall, we’re talking about a roughly $17 billion industry by 2021. It’s no wonder investors are so excited about marijuana stocks.
The Department of Finance Canada has published a proposed excise duty framework for cannabis products. The proposed level of taxation is intended to keep prices low to eliminate the black market, and would apply to all cannabis products available for legal sale, including fresh and dried cannabis, cannabis oils, and seeds and seedlings for home cultivation.
The Canadian government says this approach is intended to provide flexibility in helping support its policy goals by establishing a minimum duty amount for cannabis products, while also accounting for changing market conditions and variances in product value and potency. The framework has also been designed to capture a wide variety of products to account for the expansion of available products for sale in the future (e.g., edibles).
Revenues raised from the taxation regime would be used to support investments in public education, enforcement, research and other activities integral to an effective system of legalisation and regulation of cannabis.
The federal framework is intended to be in place once legal cannabis for non-medical purposes becomes accessible for retail sale, no later than July 2018.
The deadline for comments on the proposals is December 7.
The Proposed Excise Duty Framework for Cannabis Products is here.