Order Amending the Cannabis Fees Order (Exemptions — Sale for Medical Purposes): SOR/2020-8
Canada Gazette, Part II, Volume 154, Number 2
Registration
SOR/2020-8 January 9, 2020
CANNABIS ACT
The Minister of Health, pursuant to subsection 142(1) of the Cannabis Act footnote a, makes the annexed Order Amending the Cannabis Fees Order (Exemptions — Sale for Medical Purposes).
Ottawa, January 6, 2020
Patricia Hajdu
Minister of Health
Order Amending the Cannabis Fees Order (Exemptions — Sale for Medical Purposes)
Amendments
1 Paragraphs 10(1)(b) and (c) of the Cannabis Fees Order footnote 1 are replaced by the following:
- (b) the holder signs and submits to the Minister a written document indicating that the holder intends to sell all cannabis during the applicable fiscal year only in Canada to a person that is a client or a named responsible adult or to which an exemption has been granted under section 140 of the Act for a medical purpose and in relation to the cannabis or class of cannabis that is sold
- (i) in the case of the fee referred to in subsection 7(1), within 30 days after the earliest effective date of the licences, and
- (ii) in any other case, not later than April 30 of every fiscal year; and
- (c) the holder submits to the Minister, not later than April 30 following the applicable fiscal year, a statement of the cannabis revenue for the applicable fiscal year with respect to those licences, including the amount received from the sale of cannabis in Canada and the amount paid for the purchase of cannabis that were used to determine the cannabis revenue, accompanied by a written document confirming that all those sales were made to a person that was, at the time of the sale, a client or a named responsible adult or to which an exemption had been, at the time of the sale, granted under section 140 of the Act for a medical purpose and in relation to the cannabis or class of cannabis that was sold.
2 Paragraph 11(a) of the English version of the Order is replaced by the following:
- (a) documents or information stating the amount received from the sale of cannabis, the amount paid for the purchase of cannabis and the name of the person from which cannabis was purchased; and
Coming into Force
3 This Order comes into force on January 22, 2020.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the orders.)
Issues
The Cannabis Fees Order provides an exemption to the annual regulatory fee for licence holders who sell cannabis exclusively for medical purposes. Due to an oversight with how the Cannabis Fees Order is currently worded, some otherwise eligible licence holders may not qualify for the exemption in the year they are first licenced to sell cannabis for medical purposes (i.e. their entry year).
Objective
To address the issue and respect the policy intent of the exemption, an amendment to the Cannabis Fees Order is made to correct the oversight and enable all eligible licence holders to qualify for the exemption in their entry year. In addition, the Cannabis for Medical Purposes Remission Order is made to refund fees paid or payable by otherwise eligible licence holders under the original Cannabis Fees Order.
Background
In conjunction with the Cannabis Act, the Cannabis Fees Order came into force on October 17, 2018. The Cannabis Fees Order is designed to recover the Government’s regulatory costs by fairly charging those that benefit from the new legal market, thereby reducing costs to taxpayers. It does so through four different fees. Three of the fees are for direct services provided to licence holders: the application screening fee, the security clearance fee, and the import or export permit fee. The fourth fee, known as the annual regulatory fee, recovers the aggregate costs of administering the cannabis regulatory program that are not covered under any of the other fees.
To facilitate the supply of cannabis for medical purposes, the Cannabis Fees Order provides an exemption to the annual regulatory fee for licence holders who sell cannabis exclusively for medical purposes. To be eligible for the exemption, the licence holder must meet the following conditions:
- 1. Only sell cannabis during the applicable fiscal year in Canada to persons authorized to possess it for medical purposes;
- 2. Submit a signed document to the Minister, no later than April 30 of that year, indicating that the licence holder intends to sell cannabis exclusively for medical purposes; and
- 3. Submit a written document to the Minister, no later than April 30 of the following year, confirming that all cannabis sales were exclusively for medical purposes, along with a signed statement of cannabis revenue.
As a result of the fixed deadline of April 30 for licence holders to declare their intent to sell cannabis exclusively for medical purposes, licence holders who would have otherwise been eligible were prevented from applying for the exemption if they had received their licence after April 30 (as the window to provide their declaration of intent would have already passed).
Description
This initiative consists of two orders. The first order is an amendment to paragraph 10(1)(b) of the Cannabis Fees Order. The wording in paragraph 10(1)(b) is updated to allow any licence holder who wishes to seek an exemption to the annual regulatory fee in their entry year to declare their intent to sell cannabis exclusively for medical purposes within 30 days of the earliest effective date of their licence. For all subsequent years, the deadline to submit a declaration to sell exclusively for medical purposes remains April 30. Minor grammatical amendments are made to paragraphs 10(1)(c) and 11(a) of the Cannabis Fees Order for clarity.
The second order is the Cannabis for Medical Purposes Remission Order. As some licence holders have already paid the annual regulatory fee for the 2018–2019 and 2019–2020 fiscal years from which they could have been exempted, a remission order is necessary to implement the original policy intent of section 10 of the Cannabis Fees Order. This remission order provides for the remission of annual regulatory fees already paid or to waive fees required to be paid by licence holders who meet the conditions of the remission order. Licence holders will have 30 days from the coming-into-force date of the remission order to apply for a remission of any eligible fees paid or payable.
Together, the amendments to the Cannabis Fees Order and the Cannabis for Medical Purposes Remission Order remedy the timing issue of the declaration of intent to sell cannabis exclusively for medical purposes. These changes are designed to implement the original policy intent in the Cannabis Fees Order.
Regulatory development
Consultation
On July 12, 2018, Health Canada launched a 30-day consultation on the proposed approach to cost recovery for the regulation of cannabis. The Regulatory Impact Analysis Statement (RIAS) accompanying the Cannabis Fees Order contains the relevant analysis associated with that consultation.
As expressed in the RIAS for the making of the Cannabis Fees Order, the exemption to the annual regulatory fee for those licence holders who sell cannabis exclusively for medical purposes was intended to facilitate the supply of cannabis for medical purposes. As this regulatory proposal makes a minor modification to the Cannabis Fees Order to adhere to this original policy intent, no additional consultations were deemed necessary.
All current licence holders will be notified in writing by Health Canada of the amendments to the Cannabis Fees Order, as well as the Cannabis for Medical Purposes Remission Order, so that all parties will have an opportunity to apply for a remission of fees, should they qualify.
Regulatory analysis
Small business lens
No impacts on small businesses are anticipated for these orders.
One-for-one rule
No impacts on administrative burden costs are anticipated for these orders.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, section 4.4, a strategic environmental assessment was not conducted, as the orders address issues already covered under the strategic environmental assessments for the Cannabis Act.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for these orders.
Contact
John Clare
Director General
Strategic Policy
Controlled Substances and Cannabis Branch
Health Canada
Address locator 0302B
Ottawa, Ontario
K1A 0K9
Email: cannabis@canada.ca