The Government of Canada has proposed to amend the excise tax calculation for cannabis in the federal budget. Emerald Health Therapeutics, Inc has shared its appreciation for such a decision.
According to the company, the implementation of the proposed revision announced in the federal budget would result in the calculation of the excise duty of ingestible cannabis and hemp products being based on the quantity of THC in the products, as opposed to the current tax set in relation to the product volume. Certain low-THC products would also be subject to lower excise duties, which would provide additional tax relief for cannabis products typically used by individuals for medical purposes. If implemented, the proposed changes are expected to come into effect on May 1, 2019. Emerald believes that these revisions are likely to improve its profit margins on the products it intends to produce from its contracts to acquire harvested hemp. As previously announced, Emerald has entered into contracts to purchase 500 acres of harvested hemp (which contains very low levels of THC) in 2018 and up to 1000 acres of harvested hemp per annum from 2019 to 2022.
“We believe that the federal government’s recommendation to revise the cannabis excise tax will reduce taxes on the low-THC products Emerald intends to produce from its contracted hemp harvest for medical use,” stats Dr. Avtar Dhillon, President and Executive Chairman of Emerald. “We expect that this proposed revision to the excise tax calculation will enhance our opportunity to utilize our purchased hemp in an economically viable way as feedstock for new cannabinoid-containing ingestible products.”
For more information:
Emerald Health Therapeutics
ir.emeraldhealth.ca