Medical pot users fear price hike
Medical marijuana users worry over repercussions of federal excise tax
When Calgary senior Barb Weatherington replaced fentanyl patches with cannabis to treat her chronic spinal pain, it seemed an ideal exchange.
But with legalization of recreational cannabis threatening to bring a nearly 17 per cent federal excise tax into the medical marijuana equation in Alberta, the attractiveness of that switch dimmed, she said.
“The fact I’ve been able to get off fentanyl, they seem to be penalizing me for doing something different, something much better,” said Weatherington, 78, who turned to CBD oil about a month ago. “I think it stinks.”
She fears that excise tax, if applied to her medication, could boost the now $90-a-month cost to treat the pain of her spinal stenosis — a narrowing of the channel housing the spinal cord.
The woman said she’s already noticed fewer side-effects from the CBD compared with fentanyl, though the opioid costs far less, about $17 a month.
“When you’re a senior, that (tax) adds quite a bit of cost,” said Weatherington, adding that with the CBD oil, she enjoys greater mobility. “The cannabis is far less debilitating.”
That generally 10 per cent excise tax in other provinces is higher in Alberta to make up for the lack of a provincial sales levy and bring it in line with other provinces, said Andrew Hanon, spokesman for Alberta Treasury and Finance.
The nearly 17 per cent tax imposed on the wholesale cost is diluted to 10 per cent by the time it affects the higher retail price, he added.
Cochrane resident Colleen Kennedy, who’s been a medical cannabis patient for 1½ years, said she’s in the same situation, facing a hike to the $117 monthly price tag for her CBD and THC oil.
“I can’t afford it, I’d have to go back to the synthetic version, something less effective,” said Kennedy, 43, who receives Assured Income for the Severely Handicapped (AISH) benefits.
Her cannabis medicine has reduced symptoms of Crohn’s disease and epileptic seizures by controlling pain and improving her sleep, she said.
Her father, Paul Kennedy, said he’s also benefited from the medicine that helps him sleep.
“It’s more pleasant than taking a sleeping pill,” he said.
He said the principle of adding a tax to medication when there wasn’t one before seems wrong.
“The notion that they would apply this to medical use is hard to accept ... it’s a hideous tax grab,” he said.
“I don’t care about the recreational side being taxed but they should have looked at this differently.”
For now, many of the licensed cannabis producers who directly supply patients have agreed to absorb those costs but it’s unclear how long they will, said Allan Rewak, executive director of the industry lobby group Cannabis Council of Canada.
“Producers believe it should not be subject to an excise tax, a sin tax,” said Rewak, adding growers are also being charged a 2.3 per cent federal gross levy on all revenues. “Those additional costs do place pressures on us.”
The federal government does exempt from the excise tax packaged products containing no more than 0.3 per cent THC that “consequently have little to no associated psychoactive effects,” Jack Aubry, spokesman for Finances Canada, said in an email.
“In addition, pharmaceutical products derived from cannabis are also exempt from the excise duty, provided that the cannabis product has a drug identification number (DIN) and can only be acquired through a prescription.”
But too often those cannabis products aren’t classified as a prescription drug and so aren’t exempt from taxation, say Alberta government officials.
And Rewak said Ottawa’s low THC threshold disqualifies most medical cannabis products from the exemption.
The notion that they would apply this to medical use is hard to accept ... it’s a hideous tax grab.
“That exemption is a good first step but the threshold is far too low ... there are very few products that’ll fall into that category,” he said.
THC, he said, has been found to be more medically beneficial than is commonly believed.
Ideally, there would be no levies imposed on medical cannabis, partly to ensure patients don’t resort to less-taxed and far more dangerous opioids, he said.
Canada Finance’s Aubry said Health Canada is evaluating its drug review and approval process “so that Canadians in need have better access to an array of medicinal options.”
Rewak said he’s hopeful that will mean a cautious evolution in the classification and taxation of medical marijuana, possibly on a “disorder-by-disorder basis.”
Provincially, medical cannabis remains eligible for a tax credit, said Alberta Treasury and Finance’s Andrew Hanon.
Alberta commands a large portion of Canadian medical clients registered with licensed cannabis producers — last June it was 117,347 out of a national total of 330,758, or 35.5 per cent, according to Statistics Canada.
And though the province only accounts for 12 per cent of the country ’s population, it yielded 29 per cent of the registered medical marijuana deliveries that same month.