British Columbia to apply 20% tax on cannabis vape merchandise

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(This story has been updated to reflect a statement from the Cannabis Council of Canada.)

British Columbia’s program to slap a 20% tax on retail sales of cannabis vaporizer products imperils the good results of legalization, a marijuana business group stated.

The province’s proposed raise to its sales tax is intended to restrict vapor item access, flavors, nicotine content material, packaging and marketing, the province announced.

Having said that, B.C.’s move would make legal cannabis merchandise significantly less competitive than these sold in the illicit industry, maintaining sales away from the watchful eyes of well being regulators, professionals warn.

The Cannabis Council of Canada, an business physique representing federally regulated marijuana producers, released a statement criticizing the measure, saying it would only serve to strengthen British Columbia’s thriving illicit industry for cannabis.

“We strongly urge the B.C. government to reconsider their PST price raise,”  Cannabis Council Chair Megan McCrae wrote.

“Dramatically growing taxes on vape merchandise will permit the black industry to continue to flourish with its low costs and lower selections for regulated and dependable merchandise from licensed producers.”

Vice Chair Cameron Bishop said the overregulation and overtaxation of legal cannabis has to cease.

“It is imperiling the good results of legalization,” he stated.

Dried cannabis, extracts not for use in a vaping device, edibles and topical marijuana merchandise will be topic to the normal 7% provincial sales tax.

The 20% tax will apply to all vape merchandise, such as:

  • Vaping devices.
  • Cartridges, components and accessories.
  • Vaping substances.

The B.C. government says it will introduce legislation to raise the sales tax this month.

The new price will take impact Jan. 1, 2020, pending a public comment period and legislative approval.

Edibles, extracts and topical cannabis merchandise are anticipated to trickle into shops across Canada at the finish of this year, with wider distribution not anticipated till 2020.

Martin Landry, an analyst for Montreal-primarily based GMP Securities, expects vape pens to ultimately take up 20% of extracts sales followed by edibles (15%), beverages (10%) and other merchandise (five%).

Matt Lamers is Marijuana Organization Daily’s international editor, primarily based close to Toronto, Ontario. He can be reached at [email protected]

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