EDM6-3 Imposition and payment of duty on cannabis products

Excise Duty Memorandum

March 2025

This memorandum cancels and replaces Notice EDN55, Calculation of cannabis duty and additional cannabis duty on cannabis products, and Notice EDN60, Calculation of cannabis duty and additional cannabis duty on cannabis oil, edible cannabis, cannabis extracts and cannabis topicals.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Act, 2001 and all references to regulations are to regulations made under that Act. The information in this publication does not replace the law found in the Excise Act, 2001 and its regulations.

If this information does not completely address your particular situation, you may refer to the Excise Act, 2001 or relevant regulation, or contact your CRA regional excise office for additional information. The offices are listed at Contact information – Excise and Specialty Tax Directorate. 

On this page

• General information
• Cannabis products produced in Canada
  • Cannabis duty
  • Additional cannabis duty
  • Delivery to a purchaser
  • Rates of cannabis duty and additional cannabis duty
  • Calculating the cannabis duty and additional cannabis duty payable
• Imported cannabis products
• Cannabis products taken for use
• Unaccounted cannabis products
• Relief of duty on cannabis products
  • Relief for cannabis products imported by a licensee
  • Duty not payable on cannabis products
  • Refund for cannabis products that have been re-worked or destroyed
• Keeping records
• Filing returns
• Debts and the collections process
• Meaning of terms used in this memorandum

General information

1. In general, the Excise Act, 2001 imposes a flat-rate cannabis duty or an ad valorem cannabis duty on cannabis products under various circumstances, which are discussed in detail below.

2. An additional cannabis duty (either flat-rate or ad valorem) in respect of specified provinces is also imposed on cannabis products that are produced in Canada or imported into Canada if the cannabis products are for consumption, use, or sale to consumers in the specified provinces prescribed in section 4 of the Excise Duties on Cannabis Regulations. In the listed specified provinces prescribed in section 1 of those Regulations, the additional cannabis duty payable includes the adjustment to the additional cannabis duty.

3. Key terms relating to the excise duty framework for cannabis products are explained in the "Meaning of terms used in this memorandum" section of this memorandum. 

Cannabis products produced in Canada

Cannabis duty

4. There are two points of imposition of duty on cannabis products produced in Canada:

• a flat-rate cannabis duty that is imposed under subsection 158.19(1) at the time the products are packaged
• an ad valorem cannabis duty that is imposed under subsection 158.19(2) on packaged cannabis products at the time the products are delivered to a purchaser (for example, a provincial or territorial board, a provincially authorized distributor or retailer, or a purchaser under the Access to Cannabis for Medical Purposes provisions of the Cannabis Act)

5. The flat-rate cannabis duty is determined based on one of the following: 

• for dried cannabis, fresh cannabis, cannabis plants, and cannabis plant seeds, the quantity of cannabis product included in the package 
• for edible cannabis, cannabis extracts, and cannabis topicals, the quantity of total THC contained in the cannabis product

6. The ad valorem cannabis duty is determined based on the dutiable amount of the cannabis product. The rate of the ad valorem cannabis duty is set at 0% for edible cannabis, cannabis extracts, and cannabis topicals, meaning that no ad valorem duty is payable on these products.

7. Under subsection 158.19(3), the greater of the flat-rate cannabis duty and the ad valorem cannabis duty is payable at the time cannabis products are delivered to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped. The lesser of those duties is relieved at the time the greater duty becomes payable (in other words, the lesser duty is not payable by the cannabis licensee in this circumstance).

8. Under subsection 158.19(4), if the amount of the flat-rate cannabis duty imposed is equal to the amount of the ad valorem cannabis duty imposed, then the flat-rate cannabis duty is payable at the time cannabis products are delivered to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped and the cannabis products are relieved of the ad valorem cannabis duty (in other words, the ad valorem cannabis duty is not payable by the cannabis licensee in this circumstance).

Additional cannabis duty

9. The specified provinces (that is, all provinces and territories except Manitoba) have agreed to the coordinated cannabis taxation framework, which imposes an additional cannabis duty on cannabis products. No additional cannabis duty is imposed or payable for Manitoba because it is not a specified province.

10. The additional cannabis duty is imposed under subsection 158.2(1) in respect of the specified provinces on cannabis products produced in Canada. Subsection 5(1) of the Excise Duties on Cannabis Regulations prescribes that the additional cannabis duty is imposed on cannabis products produced in Canada if they are for consumption, use, or sale to consumers in a specified province.

11. The flat-rate additional cannabis duty is determined based on one of the following: 

• for dried cannabis, fresh cannabis, cannabis plants, and cannabis plant seeds, the quantity of cannabis product included in the package 
• for edible cannabis, cannabis extracts, and cannabis topicals, the quantity of total THC contained in the cannabis product

12. The ad valorem additional cannabis duty is determined based on the dutiable amount of the cannabis product. The rate of the ad valorem additional cannabis duty is currently set at 0% for edible cannabis, cannabis extracts, and cannabis topicals, meaning that no ad valorem additional cannabis duty is payable on these products.

13. Under subsection 158.2(2), the additional cannabis duty is payable at the time cannabis products are delivered to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped. As with the cannabis duty, the amount of additional cannabis duty payable is the greater of the flat-rate additional cannabis duty and the ad valorem additional cannabis duty, with the lesser of those duties being relieved at the time the greater duty becomes payable.

14. If the amount of the flat-rate additional cannabis duty imposed is equal to the amount of the ad valorem additional cannabis duty imposed, then the flat-rate additional cannabis duty is payable at the time cannabis products are delivered to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped and the cannabis products are relieved of the ad valorem additional cannabis duty.

15. For the listed specified provinces of Ontario, New Brunswick, Prince Edward Island, Saskatchewan, Alberta, Newfoundland and Labrador, and Nunavut, there may be a further amount payable, referred to as an adjustment to the additional cannabis duty. Therefore, for listed specified provinces, subsection 5(2) of the Excise Duties on Cannabis Regulations provides that the additional cannabis duty payable is the sum of:

• the greater of the flat-rate additional cannabis duty and the ad valorem additional cannabis duty
• the adjustment to the additional cannabis duty

Delivery to a purchaser

16. Under section 158.32, delivery to a purchaser includes:

a. delivering cannabis products, or making them available, to a person other than the purchaser on behalf of or under the direction of the purchaser

b. delivering cannabis products, or making them available, to a person that obtains them otherwise than by means of a purchase

17. Section 158.33 deems a cannabis product to be delivered to a purchaser by a cannabis licensee at the earliest of:

a. the time at which the cannabis licensee delivers the cannabis product or makes it available to the purchaser

b. the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to the purchaser

c. the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to a carrier for delivery to the purchaser 

18. For the purposes of paragraph 158.33(c), a carrier is a person that provides a service of transporting goods, including delivering mail.

Rates of cannabis duty and additional cannabis duty

19. The rates of cannabis duty imposed under section 158.19 are found in section 1 (flat-rate cannabis duty) and section 2 (ad valorem cannabis duty) of Schedule 7 to the Excise Act, 2001.

20. The rates of additional cannabis duty imposed in respect of a specified province under section 158.2 are found in section 1 (flat-rate additional cannabis duty) and section 2 (ad valorem additional cannabis duty) of the applicable schedule (1 to 12) to the Excise Duties on Cannabis Regulations for the particular specified province.

21. The rates of the adjustment to the additional cannabis duty payable in respect of a listed specified province are found in sections 5 and 6 of the applicable schedule (1 to 12) to the Excise Duties on Cannabis Regulations for the particular listed specified province. 

22. The rates of flat-rate cannabis duty and flat-rate additional cannabis duty are listed in the following table:

Rates of flat-rate cannabis duty and flat-rate additional cannabis duty

23. The rates of ad valorem cannabis duty and ad valorem additional cannabis duty are listed in the following table:

Rates of ad valorem cannabis duty and ad valorem additional cannabis duty

24. The rates of the adjustment to the additional cannabis duty in respect of the listed specified provinces are listed in the following table:

Rates of adjustment to the additional cannabis duty

Calculating the cannabis duty and additional cannabis duty payable

25. For each cannabis product delivered to a purchaser, a cannabis licensee must calculate the flat-rate cannabis duty and ad valorem cannabis duty as well as the flat-rate additional cannabis duty and ad valorem additional cannabis duty. In both cases, the greater of the duties becomes payable at the time of delivery to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped, as explained in paragraphs 7 and 13 of this memorandum. 

Step 1 – Calculate the flat-rate cannabis duty and flat-rate additional cannabis duty

26. The flat-rate cannabis duty and any flat-rate additional cannabis duty in respect of a specified province are imposed at the time cannabis products are packaged.

27. For purposes of calculating the amounts of flat-rate cannabis duty and flat-rate additional cannabis duty in respect of a cannabis product, the following rules apply:

• For dried cannabis, fresh cannabis, cannabis plants, and cannabis plant seeds, the quantity of flowering material and non-flowering material, vegetative cannabis plants, or viable seeds included in the cannabis product or used in the production of the cannabis product is determined at the time those materials, plants, or seeds are so included or used.
• If a quantity of flowering material included in the cannabis product or used in the production of the cannabis product is an industrial hemp by-product, the particular quantity that is industrial hemp by-product is considered to be non-flowering material.
• For edible cannabis, cannabis extracts, and cannabis topicals, the flat-rate cannabis duty and flat-rate additional cannabis duty are calculated based on the quantity of total THC contained in the cannabis product.

Step 2 – Calculate the ad valorem cannabis duty and ad valorem additional cannabis duty

28. The ad valorem cannabis duty and any ad valorem additional cannabis duty in respect of a specified province are imposed on packaged and stamped cannabis products at the time of their delivery to a purchaser.

29. The amounts of the ad valorem cannabis duty and ad valorem additional cannabis duty are calculated by multiplying the dutiable amount for the product by the applicable rates of ad valorem cannabis duty and ad valorem additional cannabis duty.

30. The dutiable amount for a cannabis product is calculated using the formula A × [100% ÷ (100% + B + C)], as explained in the meaning of dutiable amount in the "Meaning of terms used in this memorandum" section at the end of this memorandum.

Step 3 – Determine which of the cannabis duties and which of the additional cannabis duties are greater

31. For dried cannabis, fresh cannabis, cannabis plants, and cannabis plants seeds, each line item in a sales transaction must be reviewed to determine the greater of the flat-rate cannabis duty and ad valorem cannabis duty as well as the greater of the flat-rate additional cannabis duty and ad valorem additional cannabis duty.

32. For edible cannabis, cannabis extracts, and cannabis topicals, the flat-rate cannabis duty and flat-rate additional cannabis duty will always be greater since the rates of ad valorem cannabis duty and ad valorem additional cannabis duty are currently set at 0% for these products.

Step 4 – Calculate the adjustment to the additional cannabis duty for cannabis products delivered to a purchaser in a listed specified province

33. If the cannabis products are delivered to a purchaser in a listed specified province, the adjustment to the additional cannabis duty must also be calculated. This calculation will differ depending on whether the flat-rate additional cannabis duty or the ad valorem additional cannabis duty is payable.

34. If the flat-rate additional cannabis duty is payable, the adjustment to the additional cannabis duty is calculated by multiplying the base amount for the cannabis product by the adjustment rate set out in section 5 of the applicable schedule to the Excise Duties on Cannabis Regulations for the particular listed specified province.

35. The base amount for a cannabis product is calculated using the formula [(A − B) − C] × [100% ÷ (100% + D)], as explained in the meaning of base amount in the "Meaning of terms used in this memorandum" section at the end of this memorandum.

36. If the ad valorem additional cannabis duty is payable, the adjustment to the additional cannabis duty is calculated by multiplying the dutiable amount for the cannabis product (which is calculated in Step 2) by the adjustment rate set out in section 6 of the applicable schedule to the Excise Duties on Cannabis Regulations for the particular listed specified province.

Step 5 – Determine the amounts to be reported in Part E of Form B300, Cannabis Duty and Information Return

37. The duties on cannabis products produced in Canada are payable and must be reported at the time the products are delivered to a purchaser by the cannabis licensee that is responsible for the cannabis products immediately before those products are stamped.

38. The amounts of cannabis duty and additional cannabis duty (including any adjustment to the additional cannabis duty in respect of a listed specified province) payable must be reported by the licensee in Part E of Form B300, Cannabis Duty and Information Return, in the appropriate cannabis product section.

39. For each province or territory where cannabis products are stamped for that particular jurisdiction and delivered to a purchaser, the following information must be entered in the appropriate columns in Part E of Form B300:

• under "Sales ($)", the total amount of sales in dollars
• under "Sales [units]", the total sales of: 
  • dried/fresh cannabis in kilograms to three decimal places 
  • cannabis plant seeds or cannabis plants in units 
  • edible cannabis, cannabis extracts, or cannabis topicals in milligrams to two decimal places
• under "Packages sold (number)", the total number of packages sold
• under "Cannabis duty ($)", the total amount of cannabis duty payable 
• under "Additional cannabis duty ($)", the total amount of any additional cannabis duty payable 
• under "Adjustment to the additional cannabis duty ($)", the total amount of any adjustments to the additional cannabis duty payable

Imported cannabis products

40. Section 158.21 imposes cannabis duty on imported cannabis products, and the amount payable is the greater of the flat-rate cannabis duty determined under section 1 of Schedule 7 and the ad valorem cannabis duty determined under section 3 of Schedule 7.

41. An additional cannabis duty in respect of a specified province is imposed under section 158.22 of the Excise Act, 2001 on imported cannabis products if the person that is liable to pay the additional cannabis duty is resident in the specified province, as prescribed under subsection 6(1) of the Excise Duties on Cannabis Regulations.

42. The amount of additional cannabis duty payable is the greater of the flat-rate cannabis duty determined under section 1 of the applicable schedule to the Excise Duties on Cannabis Regulations and the ad valorem cannabis duty determined under section 3 of the applicable schedule to those Regulations.

43. For cannabis products imported into a listed specified province, the amount of additional cannabis duty payable also includes the adjustment to the additional cannabis duty, as determined under section 7 of the applicable schedule to the Excise Duties on Cannabis Regulations.

44. Section 158.24 states that for purposes of calculating the ad valorem cannabis duty and ad valorem additional cannabis duty on an imported cannabis product, the value of the cannabis product is the value as it would be determined under the Customs Act.

45. The cannabis duty and additional cannabis duty (including any adjustment to the additional cannabis duty in respect of a listed specified province) are payable by the importer, owner, or other person liable under the Customs Act to pay the duty and are collected by the Canada Border Services Agency (CBSA). 

46. For information about the CBSA's role and responsibilities associated with the importation of cannabis, refer to D-Memorandum D19-9-2, Importation and Exportation of Cannabis, Controlled Substances and Precursors.

47. Refer to paragraph 62 of this memorandum for information about an exception to the imposition of duty on cannabis products imported by a licensee.

Cannabis products taken for use

48. Subsection 158.25(1) imposes cannabis duty on cannabis products that are taken for use, including for use in research, and the amount payable is the greater of the flat-rate cannabis duty determined under section 1 of Schedule 7 and the ad valorem cannabis duty determined under section 4 of Schedule 7.

49. If the cannabis products are packaged, they are relieved of the duty imposed under subsection 158.19(1).

50. An additional cannabis duty in respect of a specified province is imposed under subsection 158.25(2) of the Excise Act, 2001 if the cannabis products are located in the specified province at the time they are taken for use, as prescribed in subsection 7(1) of the Excise Duties on Cannabis Regulations.

51. The amount of additional cannabis duty payable is the greater of the flat-rate cannabis duty determined under section 1 of the applicable schedule to the Excise Duties on Cannabis Regulations and the ad valorem cannabis duty determined under section 4 of the applicable schedule to those Regulations.

52. For cannabis products located in a listed specified province at the time they are taken for use, the amount of additional cannabis duty payable also includes the adjustment to the additional cannabis duty, as determined under section 8 of the applicable schedule to the Excise Duties on Cannabis Regulations.

53. The cannabis duty and additional cannabis duty (including any adjustment to the additional cannabis duty in respect of a listed specified province) are payable at the time the cannabis products are taken for use and by the particular person that was responsible for the products at that time. 

Unaccounted cannabis products

54. Subsection 158.26(1) imposes cannabis duty on cannabis products that are not accounted for as being in the possession of either: 

• a cannabis licensee 
• one of the following: 
  • a prescribed person that is transporting the cannabis product under circumstances and conditions that are prescribed in section 1.1 of the Regulations Respecting the Possession of Tobacco, Cannabis or Vaping Products That Are Not Stamped
  • a prescribed person that is sterilizing the cannabis product under circumstances and conditions that are prescribed in section 1.2 of the Regulations Respecting the Possession of Tobacco, Cannabis or Vaping Products That Are Not Stamped
  • an individual if the cannabis products were imported for their medical purposes in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, as applicable 
  • a person that possesses the cannabis products for analysis or destruction in a manner approved by the Canada Revenue Agency (CRA)

55. The amount of cannabis duty payable in this case is the greater of the flat-rate cannabis duty determined under section 1 of Schedule 7 and the ad valorem cannabis duty determined under section 4 of Schedule 7.

56. If the cannabis products are packaged, they are relieved of the duty imposed under subsection 158.19(1).

57. An additional cannabis duty in respect of a specified province is imposed under subsection 158.26(2) of the Excise Act, 2001 if the last known location of the cannabis products that cannot be accounted for is in the specified province, as prescribed under subsection 7(2) of the Excise Duties on Cannabis Regulations.

58. The amount of additional cannabis duty payable is the greater of the flat-rate cannabis duty determined under section 1 of the applicable schedule to the Excise Duties on Cannabis Regulations and the ad valorem cannabis duty determined under section 4 of the applicable schedule to those Regulations.

59. For cannabis products last known to be located in a listed specified province, the amount of additional cannabis duty payable also includes the adjustment to the additional cannabis duty, as determined under section 8 of the applicable schedule to the Excise Duties on Cannabis Regulations.

60. The cannabis duty and additional cannabis duty (including any adjustment to the additional cannabis duty in respect of a listed specified province) are payable at the time the cannabis products cannot be accounted for and by the particular person that is responsible for the products at that time.

Relief of duty on cannabis products

61. There are limited cases where cannabis duty is either relieved, not payable, or refundable with respect to cannabis products.

Relief for cannabis products imported by a licensee

62. Section 158.28 relieves the cannabis duty and additional cannabis duty on unpackaged cannabis products that are imported by a cannabis licensee. All such imports need to be authorized by Health Canada under the Cannabis Act. 

Duty not payable on cannabis products

63. Under section 158.3, cannabis duty is not payable on the following:

• cannabis products taken for analysis or destroyed by the CRA
• cannabis products taken for analysis or destroyed by Health Canada
• cannabis products taken for analysis by a cannabis licensee in a manner approved by the CRA
• cannabis products destroyed by a cannabis licensee in a manner approved by the CRA
• cannabis products delivered by a cannabis licensee to another person for analysis or destruction by that person in a manner approved by the CRA
• low-THC cannabis products
• prescription cannabis drugs
• non-duty-paid cannabis products that are removed from the premises of a cannabis licensee for export in accordance with the Cannabis Act

Refund for cannabis products that have been re-worked or destroyed

64. Under section 158.16, a cannabis licensee may re-work or destroy a cannabis product in a manner authorized by the CRA. Any cannabis duty and additional cannabis duty paid on the cannabis product may be eligible for a refund under section 187.1 if the cannabis licensee applies for the refund within two years after the product is re-worked or destroyed using Form B301, Application for a Refund of Cannabis Duty under the Excise Act, 2001.

65. Only the cannabis licensee that paid the duties on the re-worked or destroyed cannabis product may apply for a refund.

Keeping records

66. Under subsection 206(1), every cannabis licensee must keep all records that are necessary to determine whether they have complied with the Excise Act, 2001.

67. Subsection 206(2.01) states that every cannabis licensee must keep records that will enable the determination of the amount of cannabis product produced, received, used, packaged, re-worked, sold, or disposed of by the licensee. Records must be kept in an appropriate form and contain sufficient information to allow for the verification of the licensee's compliance with the Excise Act, 2001, including the licensee's liabilities and obligations with respect to cannabis duties and additional cannabis duties and the amount of any refund or rebate the licensee has claimed.

68. With respect to the calculation of cannabis duties payable, the licensee must retain sufficient documentation to substantiate the amounts of cannabis duty and additional cannabis duty that are payable on each delivery of a cannabis product to a purchaser, including: 

• documentation detailing: 
  • the quantities of flowering and non-flowering material, viable seeds, or vegetative cannabis plants packaged in any dried cannabis, fresh cannabis, cannabis plant, or cannabis plant seed product delivered to a purchaser
  • the milligrams of total THC contained in any edible cannabis, cannabis extract, or cannabis topical delivered to a purchaser
  • the sales price of the cannabis product(s) delivered to a purchaser 
  • the payment received
• supporting documents to verify the place of delivery

69. With respect to exports, all documents used as evidence of export must be sufficient to enable the entire shipment of cannabis products to be traced from its origin in Canada to its destination outside Canada. In addition, documentation showing that the cannabis products were removed from the premises of a cannabis licensee for export in accordance with the Cannabis Act must be maintained.

70. Records must be retained for six years from the end of the year to which they relate.

71. For more information on the requirement to keep records, refer to Memorandum EDM9-1-1, General requirements for books and records.

Filing returns

72. Section 160 requires every cannabis licensee to file Form B300 for each reporting period (that is, for each calendar month or calendar quarter) and to calculate and remit any cannabis duty and additional cannabis duty payable on that return. A return must be filed for each reporting period, even if no duty is payable.

73. If a cannabis licensee files returns on a monthly basis, they must file a return and remit any cannabis duty and additional cannabis duty payable for each calendar month. The return is due at the end of the following calendar month.

74. If a cannabis licensee has been authorized by the CRA, the licensee may file returns and remit any cannabis duty and additional cannabis duty payable on a quarterly basis.

75. The fiscal quarters are based on calendar months, not a licensee's fiscal year. All authorized licensees are required to file four returns annually, and the return periods are as follows:

• January 1 to March 31
• April 1 to June 30
• July 1 to September 30
• October 1 to December 31

76. For more information on quarterly filing, refer to Notice EDN88, Quarterly filing and remitting for all cannabis licensees.

77. Licensees must report total sales of cannabis products in dollars and quantities by province or territory on a monthly or quarterly basis, as well as the cannabis duty and additional cannabis duty payable, which includes any adjustment to the additional cannabis duty.

Debts and the collections process

78. Under subsection 284(1.1), any amount payable by a person under the Excise Act, 2001, including cannabis duty and any applicable additional cannabis duty, is a debt recoverable in Federal Court or any other court of competent jurisdiction or in any other manner provided under that Act.

79. A cannabis licensee that owes duties or is late filing returns may receive a notice or a telephone call from a CRA official as a reminder of their obligation to pay past due cannabis duty and any applicable additional cannabis duty or to file outstanding returns.

80. For more information about the collections process, go to Debt collection at the CRA.

81. If a cannabis licensee has to file returns under the Excise Act, 2001, the Excise Act, the Excise Tax Act, the Customs Act, the Income Tax Act, the Air Travellers Security Charge Act, the Underused Housing Tax Act, the Select Luxury Items Tax Act, the Digital Services Tax Act, or the Global Minimum Tax Act but has not done so, subsection 189(4) provides that any refund to which they are entitled will be held until all required returns are filed.

82. According to section 290, if a person, including a cannabis licensee, has any outstanding amounts owing under the Excise Act, 2001, the CRA may deduct or set-off any amount owing to that person by the Government of Canada (for example, a GST/HST rebate) against those outstanding amounts.

Meaning of terms used in this memorandum

83. Except as otherwise noted, the meanings provided here are based on the definitions in section 2 of the Excise Act, 2001.

Additional cannabis duty means a duty in respect of a specified province that is imposed under section 158.2 or 158.22 on cannabis products produced in Canada or imported cannabis products respectively. This duty is in addition to the cannabis duty imposed on these products under section 158.19 or 158.21. In this memorandum, additional cannabis duty also refers to a duty in respect of a specified province that is imposed under subsection 158.25(2) or 158.26(2) on cannabis products taken for use or unaccounted cannabis products, respectively. Additional cannabis duty applies in all provinces and territories except Manitoba.

Adjustment to the additional cannabis duty is not defined in the Excise Act, 2001 but is understood to refer to a duty imposed in listed specified provinces to reflect differences between the sales tax rate in a particular province or territory and the highest prevailing sales tax rate or provincial component of the HST rate among the provinces and territories.

Base amount is defined in section 1 of the Excise Duties on Cannabis Regulations to mean, in respect of a cannabis product and a listed specified province:

a. if the cannabis product is delivered or made available to a person that obtains it otherwise than by means of a purchase, the fair market value of the cannabis product

b. in any other case, the amount determined by the formula:

[(A − B) − C)] × [100% ÷ (100% + D)]

Cannabis has the same meaning as in subsection 2(1) of the Cannabis Act, which defines the term to mean to a cannabis plant and any of the following referred to in Schedule 1 to that Act:

• any part of a cannabis plant, including the phytocannabinoids produced by, or found in, such a plant, regardless of whether that part has been processed or not
• any substance or mixture of substances that contains or has on it any part of such a plant
• any substance that is identical to any phytocannabinoid produced by, or found in, such a plant, regardless of how the substance was obtained

Cannabis does not include the following, which are referred to in Schedule 2 to the Cannabis Act: 

• a non-viable seed of a cannabis plant
• a mature stalk, without any leaf, flower, seed, or branch, of such a plant
• fibre derived from the mature stalk referred to above
• the root or any part of the root of such a plant

Cannabis duty means a duty imposed under section 158.19 or 158.21 on cannabis products produced in Canada or imported cannabis products respectively. In this memorandum, it also refers to a duty imposed under subsection 158.25(1) or 158.26(1) on cannabis products taken for use or unaccounted cannabis products, respectively.

Cannabis excise stamp means a stamp that is issued by the CRA under subsection 158.03(1) and that has not been cancelled under section 158.07.

Cannabis licensee means a person that holds a cannabis licence under section 14.

Cannabis plant has the same meaning as in subsection 2(1) of the Cannabis Act, which defines the term to mean a plant that belongs to the genus Cannabis.

Cannabis product means any of the following:

a. a product that is cannabis but that is not industrial hemp produced or imported in accordance with the Cannabis Act or the Industrial Hemp Regulations made under that Act

b. a product that is an industrial hemp by-product

c. anything that is made with or contains cannabis or an industrial hemp by-product

Cannabis products include dried and fresh cannabis, cannabis plant seeds, and cannabis plants as well as edible cannabis, cannabis extracts, and cannabis topicals.

Cannabis products do not include the following, as set out in section 2 of the Excise Duties on Cannabis Regulations:

a. a test kit, as defined in subsection 1(2) of the Cannabis Regulations made under the Cannabis Act, for which a registration number has been issued, but not cancelled, under those Regulations

b. a reference standard (that is, a highly purified and standardized form of a given substance used as a measurement base to confirm the identity, strength, quality, or purity of a substance) that meets all of the following conditions:

i. it contains a known quantity or concentration of a chemical component of cannabis, such as cannabidiol (CBD), cannabidiolic acid (CBDA), THCA, or THC

ii. it is designed to be used during the course of a chemical or analytical procedure for a medical, laboratory, industrial, educational, law administration or enforcement, or research purpose

iii. it is not intended to be consumed or administered

Dried cannabis has the same meaning as in subsection 2(1) of the Cannabis Act, which defines the term to mean any part of a cannabis plant that has been subjected to a drying process, other than seeds.

Dutiable amount, in respect of a cannabis product, means, other than an amount determined in a prescribed manner in prescribed circumstances, the amount determined by the formula:

A × [100% ÷ (100% + B + C)] 

Flowering material means the whole or any part (other than viable seeds) of an inflorescence of a cannabis plant at any stage of development, including the infructescence stage of development.

Fresh cannabis has the same meaning as in subsection 1(1) of the Cannabis Regulations made under the Cannabis Act, which defines the term to mean freshly harvested cannabis leaves, flowers, or buds, not including plant material that can be used to propagate cannabis.

Industrial hemp means cannabis that is industrial hemp for the purposes of the Cannabis Act or the Industrial Hemp Regulations made under that Act. Subsection 1(2) of those Regulations defines industrial hemp to mean a cannabis plant, or any part of that plant, in which the concentration of THC is 0.3% w/w or less in the flowering heads and leaves.

Industrial hemp by-product means flowering material (other than viable achenes) or non-flowering material that has been removed or separated from an industrial hemp plant and that has not been disposed of by retting or by rendering it into a condition such that it cannot be used for any purpose not permitted under the Controlled Drugs and Substances Act or the Cannabis Act.

Listed specified province is defined in section 1 of the Excise Duties on Cannabis Regulations to mean any of the following specified provinces: Ontario, New Brunswick, Prince Edward Island, Saskatchewan, Alberta, Newfoundland and Labrador, and Nunavut.

Low-THC cannabis product means a cannabis product that:

• consists entirely of any of the following:
  • fresh cannabis 
  • dried cannabis
  • oil that is in liquid form at a temperature of 22 ± 2°C and that contains any of the following:
    • any part of a cannabis plant, including the phytocannabinoids produced by, or found in, such a plant, regardless of whether that part has been processed or not, other than a non-viable seed of a cannabis plant; a mature stalk, without any leaf, flower, seed, or branch, of a cannabis plant; fibre derived from such a stalk; and the root or any part of the root of a cannabis plant
    • any substance that is identical to any phytocannabinoid produced by, or found in, a cannabis plant, regardless of how the substance was obtained 
• contains concentrations of no more than 0.3% THC w/w, taking into account the potential to convert THCA into THC, as determined in accordance with the Cannabis Act 

Low-THC cannabis products generally do not include edible cannabis, cannabis topicals, or cannabis extracts other than an extract or a topical that is an oil as described above.

Non-flowering material means any part of a cannabis plant other than the flowering material; viable seeds; a non-viable seed; a mature stalk without any leaf, flower, seed, or branch; fiber derived from such a stalk; and the root or any part of the root of the plant.

Packaged, in respect of a cannabis product, means packaged in a prescribed package, which paragraph 2(c) of the Stamping and Marking of Tobacco, Cannabis and Vaping Products Regulations describes as being packaged in the smallest package, including any outer wrapper, package, box, or other container, in which it is sold to the consumer. This is further interpreted to mean when the product has been packaged and labelled for sale to a consumer at the retail level in compliance with the requirements for a cannabis product under the Cannabis Regulations made under the Cannabis Act. 

Person means an individual, a partnership, a corporation, a trust, the estate of a deceased individual, a government or a body that is a society, a union, a club, an association, a commission, or another organization of any kind.

Prescription cannabis drug means a cannabis product that is a drug that has been assigned a drug identification number (DIN) under the Food and Drug Regulations made under the Food and Drugs Act. It does not include a drug or mixture of drugs that may, under the Food and Drugs Act or the Controlled Drugs and Substances Act, be sold to a consumer without a prescription nor does it include a cannabis product that has been authorized for use for medical purposes by a health care practitioner under the Cannabis Regulations made under the Cannabis Act.

Produce, in respect of a cannabis product, has the same meaning as in subsection 2(1) of the Cannabis Act, which defines the term to mean obtaining cannabis by any method or process, including by manufacturing, synthesis, altering its chemical or physical properties by any means, or cultivating, propagating, or harvesting it or any living thing from which it may be extracted or otherwise obtained. For the purposes of the Excise Act, 2001, the definition of produce in section 2 of that Act also includes packaging the cannabis product.

Specified province means a province or territory prescribed by section 4 of the Excise Duties on Cannabis Regulations that has entered into an agreement with the Government of Canada for the coordination of cannabis taxation. All provinces and territories except Manitoba have entered into such agreements and qualify as specified provinces.

Stamped, in respect of a cannabis product, means that a cannabis excise stamp has been stamped, impressed, printed, or marked on, indented into, or affixed to the cannabis product or its container in the prescribed manner to indicate that cannabis duty and any applicable additional cannabis duty have been paid.

Take for use, in respect of a cannabis product, means to consume, analyze, or destroy the cannabis product.

THC means Δ⁹-tetrahydrocannabinol, the principal psychoactive constituent of cannabis.

THCA means delta-9-tetrahydrocannabinolic acid.

Total THC of a cannabis product means the total quantity of THC, in milligrams, that the cannabis product could yield, taking into account the potential to convert THCA into THC, as determined under the Cannabis Act.

Vegetative cannabis plant means a cannabis plant, including a seedling, that has not yet produced reproductive structures, including flowers, fruits, and seeds.

Viable seed means a viable seed of a cannabis plant that is not an industrial hemp plant.

Further information