Changes in Law Regarding GST and Medical Marijuana

  • April 19, 2016
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The legal landscape for the Cannabis industry has seen some major changes recently and we would like to share an important ruling with you. As MPN Society is a transparent organization, to ensure that we are aligned with these new regulations, we have updated our policies, which may affect you.

Following the recent court ruling in Hedges vs. the Queen, unlike other prescription drugs, medical marijuana sales will remain subject to GST.

During the proceedings, the defense argued that marijuana should be ruled exempt from GST under the Excise Tax Act, which waives the tax obligations for certain drugs that require a prescription.

In Canada, zero-rated drugs (drugs where the supplier does not charge GST) can be defined as any medications that are essential or require a prescription. They are a medical necessity, outlined in our tax law to be exempt from sales tax. Your average bottle of over-the-counter Advil, for instance, does not require a prescription, is subject to GST/HST, and can be obtained and purchased at your local grocery store, even your friendly neighborhood corner store.

The judges dismissed the defense’s argument that medical marijuana was the same as a prescription drug, and ruled that only drugs that are sold legally can be exempted from GST.

However, the judges agreed with previous rulings that the legislation surrounding the taxing of medicinal cannabis has “twisted itself out of shape” and concluded that the language “needs work” to determine whether or not the sale of pot should be zero-rated.

How we can help: Under the Government of Canada’s ‘Marihuana for Medical Purposes Regulations,’ patients who buy cannabis from Health Canada’s mail-order system must pay HST or GST, but can claim these levies back as medical expenses. To get a copy of the tax expense form click HERE.

What does this mean for MPN members?

We thought long and hard about implanting this change for our members. Although this increase is minimal, in accordance to this ruling, we will begin charging GST on medical marijuana products. We will continue to dedicate ourselves to providing quality cannabis products and helping our patients achieve their best selves and maintaining their livelihood.

Join us in the conversation! Add your voice to the e-petition created by Hilary Black, co-founder of the BC Compassionate Care Society, here, and help us bring awareness to the unfair taxation of medical necessities.




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