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Canada Revenue Agency (CRA) Licence

CRA Licence – ‘Cannabis Licence for Tax Purposes’

When you become a licensed cannabis producer, you must pay a federal excise duty when the cannabis products you package are delivered to a purchaser (for example, a provincially authorized distributor/retailer or final consumer)

Before a licensed producer can legally take possession of cannabis, it must be licensed by both Health Canada and the Canada Revenue Agency (the “CRA”).

The CRA cannabis licence under the Excise Act, 2001 requires that all commercial growers (cultivators, nurseries, etc..), producers and packagers (processors) must apply. Entities with a Health Canada licence for cannabis production must apply for a cannabis licence for both medical and recreational purposes.

CRA licences are valid for a period of no more than two (2) years.

Exemptions

Certain exemptions do exist, such as:

a) If you are an individual in Canada who, under the Cannabis Act:

  1. Produces cannabis for personal use.

  2. Produces cannabis for medical purposes.

  3. Is authorized to produce cannabis (a designate) for another individual for medical purposes.

  4. A cultivator of industrial hemp (note that industrial hemp growers must have their hemp flower processed at a site with a licence for cannabis processing, and that processor must have a CRA licence).

b) If your business involves only storing unpackaged cannabis products.

The following licences MUST also have a CRA Cannabis Licence before they can possess cannabis – this includes prior to taking possession of cannabis during the 10(2) Declaration of Starting Material to Health Canada.

  • Cultivation (subclass: micro or standard)
  • Processing (subclass: micro or standard)
  • Nurseries

Cannabis Excise Stamp

Each cannabis product that is for sale in Canada that contains THC (low-THC or CBD only products are exempt from the excise program as well as prescription cannabis drugs), whether for medical or recreational purposes, must have a cannabis excise stamp applied to that cannabis product by a license holder with a cannabis processing licence. Both standard and micro processors are able to apply these stamps to products under the condition that one of the processors in the supply chain (the last in the chain of custody) holds an amendment to their Health Canada licence that allows for the sale of products.

Cannabis excise stamps would have specified colours indicating the province or territory in which the product is intended to be sold. The cannabis licensee who packaged the product would be responsible for determining and applying the appropriate cannabis excise stamp before the product enters into the duty-paid market.

The excise stamp demonstrates to consumers, retailers, or industry stakeholders that cannabis duty has been paid on the cannabis product on which it is placed. Several identifying characteristics or visible features are considered.

Visible Features of the Excise Stamp

  1. The dimensions of the cannabis excise stamp are exactly 20 × 40 mm.

  2. The jurisdiction (each province and territory) would include the jurisdiction’s name abbreviation as well as the jurisdiction’s distinctive colour band and background.

  3. The unique identifier would be an alphanumeric identifier specific to each cannabis excise stamp and would start with 3 capital letters followed by 6 numbers.

  4. The duty-paid status would distinctively indicate that the cannabis duty and, where applicable, additional cannabis duty in respect of the particular province or territory, were paid on the cannabis product.

Proper use of the Excise Stamp

As a licensee, you are responsible for the proper use and affixation of the excise stamp on your cannabis products. Processors who are packaging cannabis products must ensure they do the following:

  1. Affix a cannabis excise stamp to the products at time of packaging for final sale.

  2. Calculate the duty payable on cannabis.

  3. Report (send) and remit (pay) the monthly duty payable on cannabis using Form B300, Cannabis Duty and Information Return.

  4. Report on your inventory of stamps using Form B300.

  5. Keep all your supporting documents for 6 years to support the use and destruction of stamps


Penalties may apply for unaccounted cannabis excise stamps.

Calculating Cannabis Duties

For each cannabis product delivered, you must calculate both the flat-rate and ad valorem cannabis duties and pay the higher amount. The same applies to additional cannabis duties, except in Manitoba where this calculation isn’t needed. In certain provinces, further adjustments to the additional cannabis duty are required. For all of the details regarding how to calculate cannabis duty, refer to Health Canada’s guide. 

Below is a chart that depicts cannabis rates and any additional cannabis duty.

Why Work with CannDelta?

CannDelta offers comprehensive support for your federal cannabis license application, ensuring compliance and competitiveness. Our team, including former Health Canada experts, has unparalleled insight into the regulatory landscape.

Business Plan Development
Build a solid foundation for your cannabis venture with business plans that meet Health Canada’s regulatory requirements and promote long-term growth.

Security Plan
Protect your assets and ensure compliance with thorough security plans that adhere to Canadian federal regulations.

Site Audits and Inspections
Stay proactive with detailed site audits. We identify potential issues and offer practical solutions to maintain compliance and efficiency, ensuring smooth operations.

Standard Operating Procedures (SOPs)
Enhance daily operations with tailored, compliant SOPs designed to facilitate smooth business processes and boost efficiency.

Marketing Plan
Make your brand stand out! We help you build your brand and create outreach strategies to establish your presence in Canada’s cannabis market.

Employee Staffing and Training Plan
Prepare your team for success with our recruitment strategies and customized training programs, ensuring your staff is well-equipped to excel in the cannabis industry.

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