There has been much speculation on how Canada will tax cannabis,
which is expected to be legalized for retail sale in Canada by July
2018. The much anticipated draft tax legislation was released by
the Department of Finance on Friday November 10, 2017, and is out
for consultation until December 7, 2017.
Proposed Tax Regime
Under the proposed cannabis tax regime, most supplies of
cannabis will be subject to GST/HST (at rates currently ranging
from 5-15% across Canada). Cannabis, both for recreational or
medical use, will also be taxed under the Excise Act, 2001
(Canada) (the "Act"), which currently
imposes federal excise duty on spirits, wine and tobacco product
made in Canada. Both taxes on cannabis will be administered by the
Canada Revenue Agency.
