Canadians selling medical marijuana outside the licensed mail-order system must still watch out for the taxman, according to a Federal Court of Appeal ruling that reasserts Ottawa’s right to collect sales taxes on any and all pot that is sold.
In a unanimous decision released Monday, judges dismissed an appeal by Gabriola Island grower Gerry Hedges to stop the clawback of almost $15,000 in GST for marijuana he sold over several years to the Vancouver-based B.C. Compassion Club Society, Canada’s oldest dispensary.
Alistair Campbell, Mr. Hedges’s tax lawyer, said the case centred around whether marijuana should be treated like a prescription drug. Mr. Campbell argued in court that cannabis should be exempt from federal sales tax because members of the dispensary must go through a process akin to getting a prescription, unlike over-the-counter drugs that are subject to GST, such as extra-strength Tylenol.
The judges ruled that only drugs that are sold legally can be exempted from GST.
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