BC's medical cannabis users have more than just the excise tax to worry about

Users can pay multiple taxes on medical cannabis, depending on the province. (JorhomGraphic /Shutterstock)

Much has been said about the federal excise tax on medical cannabis, which ups the price for patients an additional 10% (or more) per sale. But it’s not the only potential budgetary strain creeping in for some medical users.

Provinces like Quebec are slapping a provincial sales tax (QST/HST/PST) on medical cannabis – whereas Manitoba, for example, has opted out.

British Columbia is one of the most recent provinces to announce that it will apply PST to medical cannabis.

“Effective October 17, 2018, medical cannabis products sold by licensed producers are no longer exempt from PST,” BC Premier John Horgan’s NDP government said in a press release earlier this month, instructing medical cannabis providers to “charge 7% PST on retail sales of medicinal cannabis products.”

Prescription cannabis is already subject to GST and a federal excise tax, and is the only prescription medication that isn’t zero-rated (meaning tax-exempt) in Canada – based on a technicality that some say is unreasonable.

“Cannabis is not officially a prescription, so there’s a very small but important difference between a prescription drug and a physician-authorized drug, and that essentially boils down to the fact that cannabis is not an ‘approved’ medicine – so it’s not officially prescribed,” Jordan Sinclair, Vice President of Media & Communications at Canopy Growth told Daily Hive.

“If you look at the regulations, it’s authorized by a physician through a medical document, not a prescription.

“In every other sense, you walk into a doctor’s office, you walk out with a piece of paper saying you can have some narcotic, and then you go and get that filled… if you describe that to a 100 people on the street and ask what you just described, 99% will say a prescription. But it technically isn’t.”

Federal NDP Health Critic Don Davies (Vancouver – Kingsway), who estimates that the excise tax alone would cost medical patients an additional $1875, has a similar take.

“The BC Provincial Sales Tax Exemption and Refund Regulation provides a provincial sales tax (PST) exemption for drugs sold on the prescription of a practitioner and other substances that alleviate pain. Based on these existing rules, medical cannabis should be exempt from PST when sold for the purposes of alleviating pain,” Davies told Daily Hive via email.

“Moreover, given that medical cannabis is produced through a highly regulated federal regime known as the Access to Cannabis for Medical Purposes Regulations (ACMPR), provincial authorities should recognize that when a practitioner signs an ACMPR declaration, they are authorizing their patient’s medical use of cannabis,” he says.

“Indeed, the College of Physicians and Surgeons of British Columbia considers the medical document authorizing patient access to cannabis to be equivalent to a prescription.”

The incongruency of the federal and provincial stands on medical cannabis taxation places both factions (and their values) at odds. Adding to the confusion is a lack of transparency from the province, which has been reluctant to comment on the PST decision beyond the initial press release.

Daily Hive contacted the offices of both the BC Ministries of Finance and of Mental Health & Addictions via email in October to get the provincial government’s take on how the PST might affect the communities they serve.

A representative for the Ministry of Finance, Sonja Zoeller responded, saying they would compile the answers from both ministries into one email response. They have not yet done this at time of publication.

Some drug policy experts are condemning the move to charge patients more for their meds.

“The bottom line with any tax on medical cannabis, be it PST, the excise tax or one of the others, is that we are treating medical cannabis differently from virtually all our other medicines,” says Kira London-Nadeau, president of Canadian Students for Sensible Drug Policy (CSSDP) and board member of the National Association for Cannabis Health and Education (NICHE).

London-Nadeau says the taxes are misguided, and worries that the additional cost will do patients more harm than good.

“It’s an approach where stigma overshadows best practices. These taxes are meant for retail goods, or in other words, commodities.

“We’re commodifying the health of people who use cannabis medically, and patients have to pay for it – literally.”

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