Ottawa says recreational cannabis will qualify for tax exemption

OTTAWA — According to the government website on the implementation of legal marijuana for both medical and recreational purposes, it has been announced that on-reserve sales of marijuana to customers with a valid Status Card, will not be taxed. How that will work with non-status sales on reserve may be an issue the same as it is currently with the sale of rez-tobacco products. But at least for now, once recognized legal dispensaries are set up on-reserve the control of its sales will be much easier thing to deal with.

That decision has answered fears by some that taxation might be “trojan-horsed” onto reserves with this new legislation. That does not mean however, there will be no tax at all. Federal excise tax of 5% will still apply.

Government controlled pot will average $10 gm, once it becomes legal Wednesday, according to recent media release out of Ottawa.

Those mom-and-pop unregistered dispensaries, which have been popping up like weeds everywhere, will be forced to either shut down or become officially licensed and will be required to keep records of their sales.

Even though the implementation of the new law was moved from July to October, there are still more questions than answers as the new pot paradigm takes hold.

The official word from Ottawa is, “First Nations people with a valid certificate of Indian Status card will be tax exempt when buying marijuana from a business located on reserve land.”

Three/quarters of the revenue from the cannabis excise tax will go to provincial governments and the remaining 25 per cent to the federal government. The federal portion of the excise tax revenue will be capped at $100 million annually, with any federal revenue in excess of that going to the provinces and territories.

The marijuana industry is projected to reach $15.2B by 2020, but others believe that estimate is low.

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