Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and Specialty Tax Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Client name]
[Authorized representative]
[Street address]
[City], [Prov] [PC]
Case Number: 9000389
September 23, 2025
Dear [Authorized representative]:
Subject: Technical Interpretation – Treatment of “sugar leaves” as flowering material
Thank you for your correspondence of [MM/DD/YYYY] concerning the application of the Excise Act, 2001 to cannabis “trim”, specifically related to the “sugar leaves” of a flowering cannabis plant.
You have requested a clarification on:
1. The inclusion of cannabis “trim”, specifically “sugar leaves”, as flowering material under the Act.
2. Whether, if “sugar leaves” are included in a dried cannabis product, the excise duty rate for flowering material or non-flowering material should be used.
1. The Canada Revenue Agency considers “trim” to be the low-value foliage (“fan leaves”) that is removed from the cannabis plant during the vegetative stage of development. The main issue then becomes whether “sugar leaves” should be considered flowering material. Section 2 of the Act defines “flowering material” as follows:
flowering material means the whole or any part (other than viable seeds) of an inflorescence of a cannabis plant at any stage of development, including the infructescence stage of development.
From the definition of flowering material, reference is made to the inflorescence of the cannabis plant. The inflorescence is commonly referred to as the bud complex of a cannabis plant and differs from a traditional flower in terms of botany.
The inflorescence consists of both reproductive and non-reproductive elements including leaf-like structures such as bracts, calyxes and perigonal bracts. Transitional “sugar leaves” are relatively small leaves with few leaflets occurring in the inflorescence, generally between the clusters of flowering material or at the bottom of the bud complex.
“Sugar leaves” only grow during the “flowering” life cycle of a cannabis plant, and as such are included in the definition of flowering material shown above, even if they are removed or trimmed from the inflorescence.
For your reference, please refer to “Completing a cannabis duty and information return - Canada.ca”, which states that “sugar leaves” are to be included as flowering material in the instructions for completing Part B: Cannabis product inventory – Unpackaged on the B300 Cannabis Duty and Information Return.
2. Further to the information provided above, “sugar leaves” are included in the definition of flowering material and are not considered non-flowering material under the Act. Therefore, if “sugar leaves” are used in the production of a dried cannabis product, the rate of duty on the product would be in accordance with subparagraph 1(a)(i) of Schedule 7 to the Act for the cannabis duty and subparagraph 1(a)(i) of the respective schedule (that is, schedules 1 to 12) to the Excise Duties on Cannabis Regulations for the additional cannabis duty.
Information on how to calculate the amounts of cannabis duty and additional cannabis duty on cannabis products produced in Canada can be found in Excise Duty Memoranda EDM6-3 Imposition and payment of duty on cannabis products.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (519) 473-7351.
Yours truly,
Jason Sterling
Industry Sector Specialist
Excise Duty Operations - Cannabis
Excise Duty Division
Excise and Specialty Tax Directorate
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