Cannabis duty – Calculate the duty on cannabis

The information described on this webpage is based, in part, on amendments to the Excise Act, 2001 under Bill C-74, Budget Implementation Act, 2018, No. 1, which received Royal Assent on June 21, 2018 and, in part, on the draft Excise Duties on Cannabis Regulations announced by the Department of Finance Canada on September 17, 2018.

Who must pay the cannabis duty

A cannabis licensee who packages cannabis products must pay the applicable duties.

For cannabis products that are imported, the person who must pay the duty is the importer, owner or other person who is liable under the Customs Act. A cannabis licensee does not have to pay the duty at the time of importation.

GST/HST also applies to cannabis products. For more information, see Charge the GST/HST.

How to calculate the cannabis duty on your sales

As a cannabis licensee who packages and stamps cannabis products, the cannabis duty you must pay is the higher of:

  • a flat-rate duty
  • an ad valorem duty

A flat-rate duty is imposed when a cannabis product is packaged. An ad valorem duty is imposed when a cannabis product is delivered to the purchaser. If the two duties are equal, the flat-rate duty is payable.

The cannabis duty is payable when you deliver a cannabis product to the purchaser. You must keep track of the flat-rate duty and the ad valorem duty and report the higher duty payable on a transaction-by-transaction basis.

To find out how to calculate the duty in different situations, see:

Duty rates for cannabis products
 Cannabis plant product Flat-rate duty Ad valorem duty
 Flowering material $0.25 per gram 2.5% of the dutiable amount
 Non-flowering material $0.075 per gram
 Viable seed/seedling $0.25 per seed/seedling

Additional cannabis duty

An additional cannabis duty on cannabis products would be imposed for provinces and territories that have entered into an agreement with the Government of Canada for the coordination of cannabis duty.

For more information on how to calculate the additional cannabis duty and the rates of additional cannabis duty, see Excise Duty Notice EDN55, Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Products

How to calculate the flat-rate duty

The flat-rate duty is calculated at the time a cannabis product is packaged. It is based on the quantity of flowering and non-flowering material included in the cannabis product or used in the production of the cannabis product. If a packaged product is made up of a combination of different material types (for example, cannabis oil made from both flowering material and non-flowering material), calculate the flat-rate duty based on the quantity of each type of material included in the cannabis product or used in the production of the cannabis product.

How to calculate the ad valorem duty

Calculate the ad valorem duty on the dutiable amount of the cannabis product at the time a cannabis product is delivered to the purchaser.

Use the following formula to calculate the dutiable amount:

A × [100% ÷ (100% + B + C)]

A = the total of the following amounts:

  • the consideration determined for GST/HST purposes
  • any additional consideration for the container the product is packaged in
  • any other amount charged for advertising, financing, commissions

B = the ad valorem cannabis duty rate set out in section 2 of schedule 7 to the Excise Act, 2001 (currently at 2.5%)

C = the ad valorem additional cannabis duty rate that applies to specified provinces (currently at 7.5%), plus the adjustment rate for any listed specified provinces, or 0% if no additional duty applies.

To calculate the ad valorem cannabis duty, multiply the dutiable amount by 2.5%

How to calculate the additional cannabis duty

For more information on how to calculate the additional cannabis duty and the rates of additional cannabis duty, see Excise Duty Notice EDN55, Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Products.

What to do with the cannabis duty collected

At the end of each month, you must report and remit the duty on cannabis payable in the previous month using Form B300, Cannabis Duty and Information Return.

What records to keep

You must keep all records that will support the information you provide on your Form B300. This includes the amount of cannabis product produced, received, used, packaged, sold and disposed of. You must be able to support the cannabis duty that you reported as payable.

You must keep your records for a period of at least 6 years from the end of the last year to which they relate.

For more information on the requirement to maintain books and records, see Excise Duty Notice EDN55, Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Products.

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