Canada’s cannabis legalization roll out had the opportunity to hit the ground running, but instead, just over a year since coming into force, it is still on shaky legs.
On October 17, 2019, Health Canada opened up new product submissions, making way for the next wave of regulated cannabis products. Extracts and edibles have been noticeably missing from licensed retail shelves, with the first round of new product offerings expected in mid-December at the earliest.
Although some items may be available in time for the holidays, vaping has been gifted yet another lump of coal. Vaping-related deaths and illnesses spurred the conversation towards blanket bans, without proper insight into the need for creating access to regulated, quality-controlled products.
The government’s rhetoric around legalization has always been about protecting public health and safety and diverting the illicit cannabis sales. Québec is the first province to ban cannabis vape products on the legal market, with little regard for how this will affect consumers. There is already an established consumer market for these products, and restricting access forces people to find these items in the underground which can have harmful health implications linked to unsafe additives and hardware.
British Columbia, which should be leading the charge in building a successful legalization model, has also faltered. Limited licensed stores, no official farm gate legislation, and now, a 20% tax on vape products and accessories has slowed our province’s progression towards an economically viable and consumer-friendly legal cannabis market.
If the proposed legislation passes, all vape products and accessories, including cannabis and nicotine, will be subject to a 20% sales tax as of January 1, 2020. The expressed logic behind the tax is to protect youth by limiting access, and while this is an important endeavour, it poses more harm to the general public.
Vape Tax Limits Access to Regulated Products
Limiting access to legal products ignores the existing mature unregulated market. Recent reports indicate that the majority of consumers are still purchasing from traditional supply channels, and all cannabis oil vape products are currently procured from illicit sources.
If the 20% tax is meant to deter consumers from accessing legal product, it will only lead them to purchasing vape pens that have not been subjected to Health Canada’s quality control standards.
Furthermore, while the intention may be to limit youth access by imposing a higher price point, it also negatively affects marginalized populations who already face economic discrimination.
Dry herb vape hardware is also subject to the 20% sales tax. This method of consumption is a favoured alternative to combustion for medical consumers, many of whom face economic barriers to purchasing legal cannabis, which is both taxed (unlike any other medicine) and expensive.
In the interest of public health and safety, it is challenging to argue that this tax has the public’s welfare in mind.
Vape Tax Conflates Harms of Regulated and Unregulated Products
The influx of vaping-related deaths and illnesses are tragic and demonstrate a need for quality controlled products. These events also indicate that we need more research into vape products so that we can properly assess health and safety concerns.
To do so, epidemiologists need to track health outcomes for individuals in populations and trace them back to specific products, with specific additives, in a specific supply chain. Our industry needs data, but that data is only viable if it comes from a trackable source. This is challenging to do if consumers are accessing products on the unregulated market and researchers don’t actually know the details of what people are consuming, or where it came from.
If we are conflating data from regulated and unregulated market it draws into question the reliability of assessing health consequences from a class of product, which makes it even more challenging to create adequate legislation that is meant to protect the public.
Vape Tax Hinders the Legal Cannabis Market
Consumers want vapes. The regulated industry has the opportunity to capture a fair share of consumers who purchase these products, but less so if consumers are being asked to pay a burdensome tax.
This negatively impacts consumers who will be more likely to purchase products that have not been quality controlled, and stifles the legal market which is a huge driver in the Canadian economy, even revitalizing entire communities in economically depressed regions.
The entire legal supply chain is affected by the consequences of less-affordable access. If there is less consumer demand for legal product, processors and retailers will suffer, further hurting an industry that is struggling to find its footing.
If the true motivation is to prevent youth access and protect public health, legislators should put a stronger emphasis on education and harm reduction programs as opposed to punitive tax measures.