Operating a cannabis business? Get to know the excise duty

Under the excise duty taxation framework, if you (or your organization/business) want to cultivate, produce or package cannabis products, you must obtain a cannabis licence from the CRA prior to beginning these activities. To qualify for a CRA cannabis licence, you are also required to obtain a licence from Health Canada.

How to get your CRA cannabis licence

To become a CRA cannabis licensee, you must produce or package cannabis products. The CRA’s definition of a cannabis product is consistent with the definition of cannabis in the Cannabis Act.

Only a CRA cannabis licensee may possess unpackaged, unstamped cannabis products. You are not eligible for a CRA licence if your business involves only storing unpackaged cannabis products.

  • Activities that do not require a licence:
    • cannabis products that are produced in Canada by an individual for their personal use and in accordance with the Cannabis Act;
    • cannabis products that are produced in Canada by an individual, under the Cannabis Act, for the medical purposes of the individual; and
    • cannabis products that are produced in Canada by an individual who, under the Cannabis Act, is a designated person who is authorized to produce cannabis products in Canada for the medical purposes of another individual.

What to do after you receive your CRA cannabis licence

When you become a licensed cannabis producer, you must pay a federal excise duty when the cannabis products you package are delivered to a purchaser (for example, a provincially-authorized distributor/retailer or final consumer).

With a few exceptions, a cannabis excise stamp must be present on all of your cannabis products that are available for purchase.

Once licensed, you are required to:

  1. Purchase and apply cannabis excise stamps to your products (if you package cannabis products)
  2. Calculate the duty on your sales
  3. File your monthly return and remit excise duty to the CRA
  • The cannabis excise stamp (PDF)

    Each province and territory has a different coloured cannabis excise stamp for products that are being sold in their respective jurisdiction.

Keep your business compliant

The CRA wants your cannabis business to start off on the right foot and remain compliant.

  • Avoid potential penalties by familiarizing yourself with the following important information:
    • You may only start production activities or take possession of unstamped, non-duty paid cannabis once you have received your CRA licence. Even if you have received your Health Canada licence, penalties can apply if you do these things prior to receiving the CRA licence.
    • You must not sell cannabis that is unpackaged, unstamped, and non-duty paid to a person who does not hold a CRA licence. As a seller, it is your responsibility to make sure your purchaser holds a CRA licence before delivering unpackaged cannabis product.
    • Only you are allowed to possess the cannabis excise stamps issued to you. You cannot provide your stamps to another cannabis licensee under any circumstances.
    • You must apply a cannabis excise stamp to packaged cannabis extracts (excluding low-THC cannabis oils), edible cannabis, and cannabis topicals , whether or not there is minimal or no total THC contained within the cannabis product. Dried and fresh cannabis and cannabis oils that contain concentrations of no more than 0.3% THC w/w are considered low-THC products. Low-THC cannabis products per the excise duty framework do not require a cannabis excise stamp and are exempt of duty.
    • You must remain current with your monthly return filing and remittances to maintain your CRA licence and continue placing orders for cannabis excise stamps.

Questions about cannabis

You can contact the CRA with your cannabis questions.

For more information on obtaining your CRA cannabis licence, contact your regional excise office.

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