The government must find taxation solutions that help ensure medical cannabis is affordable and encourages investment in the industry.
In 2015, research funded by the University of British Columbia Institute for Healthy Living and Chronic Disease Prevention found more than half of respondents who use cannabis for medical purposes reported that they can never or only sometimes afford to buy enough cannabis to relieve their symptoms, and a third of respondents stated that they often or always have to choose between medical cannabis and other life necessities, such as food, rent and other medicines.
At the time, patient advocates across the country spoke passionately about the unfair financial burden medical cannabis patients bear, in part because the drug is subject to sales tax. Licensed producers and patient associations alike argued that, as a drug therapy acquired only through authorization by a qualified health care practitioner and not available over the counter, medical cannabis should be treated like other prescription drugs and be exempt from sales tax.
So why, more than two years later, are we still mired in this debate?
What’s more, the federal government is reviewing a recommendation that may have additional cost implications for patients: to require all cannabis products removed from a federal licensee to carry excise stamps indicating that the appropriate taxes have been paid, like those attached to tobacco packaging. The approach is outdated, costly and overly complex, and the alcohol industry moved away from it years ago, now administering any required controls through a far more efficient reporting process.
It is somewhat confounding to find ourselves about to launch one of the most dynamic new industries in the world and yet still anchored to obsolete ideas of medicine and state control.
In Canada, all prescription products are exempt from tax. Medical cannabis, authorized by a medical document that even the Ontario College of Physicians refers to as a “prescription,” should be no different. To do otherwise is not only to disadvantage many Canadian patients but also to prey upon their vulnerability and demonstrated medical need.
It is true that the introduction of a legal, recreational cannabis market for adult use has complicated matters. The Task Force on Cannabis Legalization and Regulation warned us to be diligent, and to be careful not to tempt Canadians, through the waiving of taxes, to exploit the medical cannabis system for recreational purposes. Policies based on fear and suspicion are rarely as effective as we hope; treating medical cannabis like its prescription peers, however, actually could have significant shared benefit.
We know, for instance, that Canada is in the throes of an opioid use epidemic. Opioid-related overdoses were responsible for more than 2,800 deaths in Canada in 2016. We also know that clinical evidence supporting the use of cannabis as an effective harm reduction strategy is quickly mounting. As medical cannabis continues to displace prescription drugs and other illicit substances, helping reduce the health burden of their problematic use, should the Department of Finance Canada not be consistent in how it treats these products?
Taken a step further, what physicians and regulators should be concerned about is not attracting but rather alienating the patient consumer base. Today, the majority of our company’s new medical cannabis patients are prescribed cannabis that is high in cannabidiol (CBD, the non-psychoactive component of cannabis) and low in tetrahydrocannabinol (THC, the chemical compound in cannabis responsible for a euphoric high).
This “start low, go slow” approach to both the dose and the level of THC makes good sense for new patients, particularly those who have not used cannabis before, as they work with their doctors to optimize symptom relief. If the prices of medical and recreational cannabis are the same, patients may simply choose to circumvent consultations with physicians altogether and buy products at adult recreational locations, without medical guidance. Suboptimal outcomes and negative experiences are the risks of such an approach. Even the best retailer is not a substitute for medical expertise.
For these reasons, many of Canada’s licensed producers, including Organigram, support the grassroots efforts of advocates such as Jonathan Zaid and Canadians for Fair Access to Medical Marijuana in opposing taxation of medical cannabis.
As Canadians, we all began this cannabis journey as pioneers and watched as our homegrown industry quickly became a global leader. We have demonstrated openness to a new, medically focused industry and a new way of thinking about cannabis as a legitimate therapeutic option that ignited both opportunity and a sense of hopefulness. Our industry embraced basic and clinical research, looked for ways to collaborate with and educate our allied health care professionals and served as a role model to other countries. But leadership can be lost.
Taxing medical cannabis is wrong: as the #DontTaxMedicine campaign says, “Taxes placed on medical cannabis create further financial barriers to quality of life and discourages Canadians from accessing the legal and regulated system put in place to help them.”
It is unfortunate that available cannabis isn’t necessarily affordable cannabis; to ensure long-term access, we must address the real financial barriers patients encounter every day. There is no question that lack of affordability will limit some medical cannabis users’ ability to manage their health conditions.
We need our federal government to establish thoughtful taxation solutions that protect access to medical cannabis and help ensure its affordability. Canada needs to continue to encourage investment in the medical cannabis industry and not inhibit it with prohibitive and punitive tax structures. We need to prioritize the wellness of our neighbours and recognize medical cannabis alongside its tax-free prescription counterparts. In short, Canada needs to continue to lead.
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