Hedges – Tax Court of Canada decision suggests that patients must pay GST or HST on their purchases of medical marihuana

The zero-rating of controlled drugs in Sched. VI, Part I, s. 2(d) would apply to dried marihuana if it qualified as a "drug" which, by virtue of the Marihuana Medical Access Regulations, may only be sold to a consumer with a "prescription" or under an "exemption" from Health Canada.  C Miller J found that although dried marihuana was a drug, the ailment certification by a medical practitioner in order for a consumer to be granted an "Authorization to Possess" by Health Canada was not a prescription, nor was such ATP an "exemption."

Although the taxpayer in this case was an unlicensed producer selling to an unauthorized purchaser, the same reasoning suggests that licensed producers also are required to charge GST or HST to consumers with ATPs.

Neal Armstrong. Summary of Hedges v. The Queen, 2014 TCC 270 under ETA, Sched. VI, Part I, s. 2(d).