Fee Exemption for Medical Purpose-only Cannabis License Holders

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The “Order Amending the Cannabis Fees Order” (SI/2024-38) under the authority of the Minister of Health introduces changes to the Cannabis Fees Order under the Cannabis Act, with a focus on adjusting the regulatory fees and exemption processes for cannabis licence holders who sell cannabis exclusively for medical purposes.

The amendments are designed to address technical issues that have prevented certain eligible licence holders from qualifying for an exemption from the annual regulatory fee during their “exit year,” which is the final year they sell cannabis for medical purposes. Under the current structure, which came into force in 2018 alongside the Cannabis Act, licence holders must follow a strict process to qualify for exemptions. However, many licence holders were disqualified because of confusion, missed deadlines, or documentation errors. The amendments to section 10 aim to simplify this process, increase the rate of exemption qualifications, and reduce administrative burdens while preserving the original policy goal of ensuring access to medical cannabis.

Under the previous system, licence holders who sold cannabis exclusively for medical purposes could apply for an exemption from the annual regulatory fee, but only if they met specific conditions such as submitting a declaration of intent and providing a statement of cannabis revenue. For licence holders in their exit year, it was often disingenuous or impossible to declare intent to sell cannabis for medical purposes if they had already ceased operations or had their licences revoked before the fiscal year’s deadlines. Additionally, those whose licences were revoked or expired before these deadlines were automatically disqualified because they could not submit the necessary paperwork. The process was further complicated by fixed deadlines and a lack of flexibility for the Minister of Health to make administrative adjustments. As a result, exemption qualification rates were lower than expected, contrary to the original policy intent.

The amendments introduce five key changes to section 10. First, a new subsection (10(1.1)) allows licence holders in their exit year to qualify for the exemption without needing to submit a declaration of intent during the applicable fiscal year. This includes those whose licences expired or were revoked by September 30 or those who informed Health Canada by that date that they intended to cease operations. Second, subsection (10(1.2)) ensures that licence holders who notify Health Canada about ceasing activities are exempt from submitting the declaration of intent until they resume operations. This provides greater certainty and prevents unnecessary yearly paperwork.

Additionally, the amendments extend the deadline for new licence holders (those in their “entry year”) to submit the declaration of intent from 30 to 60 days, giving them more time to comply with regulations. By simplifying the exemption process, extending deadlines, and reducing administrative burdens, these changes are intended to improve exemption qualification rates and ensure that medical cannabis remains available to those who need it.

Canada (SI/2024-38) August 28, 2024