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Canadian Government Proposes $1 Per Gram Federal Cannabis Tax

With Canada’s legalization date looming, North America’s northernmost nation is laying the groundwork for what will soon be the world’s largest national adult-use cannabis marketplace. Last week, Liberal MP Bill Blair — the former chief of police for Toronto and Prime Minister Justin Trudeau’s point man for the country’s legalization process — announced the federal government’s plan for taxing the industry.

According to an Edmonton Journal report, the plan would create a federal excise tax of either $1 per gram of cannabis or 10 percent of the final retail price — whichever is higher. Revenues from the excise tax would be divided evenly between federal and local authorities.

“I’m very comfortable that the level of taxation that has been determined as appropriate in this case achieves our goals of keeping the price sufficiently low to be competitive with an illicit market, while at the same time not creating an incentive for the consumption and purchase of this drug,” said Blair.

Federal and provincial sales taxes would still be applied in addition to the excise tax, meaning that customers should expect cannabis prices to fluctuate from province to province.

Blair’s announcement last week kicked off a period of soliciting public consultations that will end Dec. 7, which Blair says should give federal, provincial, and territorial finance ministers enough time to gauge public comments on the proposed tax plan before convening in Ottowa on Dec. 10-11.

Canada‘s legal marketplace is expected to launch July 1, 2018.

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