The amendments to the Excise Duties on Cannabis Regulations was published in Canada Gazette II Vol. 153 on June 25, 2019.
Amendments are made to the Excise Duties on Cannabis Regulations to change the rates of additional excise duty in respect of the coordinated province and territories that apply in respect of cannabis products that are edible cannabis, cannabis extracts and cannabis topicals. The amendment also adds the definition of “THCA” to section 2 of the Act. “THCA” is defined in section 2 of the Act to mean delta-9-tetrahydrocannabolic acid.
Under the Cannabis Act, three new classes of cannabis products will become available for legal retail sale later this year, namely edible cannabis, cannabis extracts and cannabis topicals. On March 19, 2019, the Minister of Finance announced as part of Budget 2019 new tetrahydrocannabinol-based excise duty rates that will apply in respect of these three classes of cannabis products, including cannabis oils. Under the terms of the Coordinated Cannabis Taxation Agreements (CCTAs) that Canada has entered into with most provincial and territorial governments, regulations are required to make corresponding changes to the rates of excise duties that apply in respect of those provinces and territories.
These amendments are now in effective. Sections 1 to 4 of each of those Schedules to the Regulations are amended in order to ensure that the amount of additional duty in respect of a province or territory on a cannabis product, before any sales tax adjustment that may apply, continues to be three times the amount of federal duty in respect of the cannabis product. For cannabis products that are dried cannabis, fresh cannabis, cannabis plants and cannabis plant seeds, the determination of that amount of additional duty, as described above, remains unchanged. For all other cannabis products, such as oils, edibles, extracts and topicals, that amount of additional duty is now equal to the amount obtained by multiplying the number of milligrams of total tetrahydrocannabinol (THC), as defined in section 2 of the Act, of the cannabis product by the specified rate per milligram of total THC. The rate is $0.0075 per milligram of total THC in the cannabis product.
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