Canada will soon be taxing cannabis differently. The new system for taxing cannabis will see THC taxed at a rate of $0.01 per milligram. Currently, there are taxes in place for both retail and medical cannabis that are handled differently. Also, there are cannabis taxes that each province carries just like the one’s different states and counties in the U.S have in place.
It seems Canada is keeping their eyes on the United States regarding cannabis legalization and figuring out what not to do. A great example of what not to do is allocate exuberant amounts of time into drafting policy and regulation that ends up only hurting the new legal cannabis industry rather than helping it.
Great News For CBD & Low THC Consumers
The new taxing system for cannabis will tax THC content instead of a set tax on cannabis across the board. THC will be taxed by the milligram meaning you would pay more in Canada for more potent cannabis products that have higher THC percentages.
Some would argue that potency is not where it’s at as a lot of folks enjoy other forms of cannabinoid therapies that do not contain high levels of THC. Topicals, lotions, sprays, roll-ons, edibles, and other cannabis products contain higher levels of CBD and other cannabinoids with little to no THC. Although, these products are typically used more by the medical community this new tax will help to make CBD and low THC products more accessible and desirable.
Could Excessive Taxes Push People To The Black Market?
California overlooked some significant details when drafting their policy concerning cannabis taxes. Individual counties can implement their own tax on top of already rather excessive state taxes. Cannabis faces some of the highest taxes of any legal business in the world. How long will consumers put up with this type of tax before they fade to black returning to the black market for their cannabis needs? Some places in California have taxes on cannabis as high as 45% which I think we all can agree is utterly ridiculous and will only drive consumers to the black market.
Whether cannabis is taxed based on weight or THC concentration, it is not as important as the rates that are put in place. If the taxes are set too high, the regulated system will continue to struggle with the fight to take out the black market.