British Columbia plans to slap a 20% tax on retail sales of vaping products, including cannabis.
The new rules are intended to restrict vapor product access, flavors, nicotine content, packaging and advertising, the province announced this week, as well as increasing taxes.
The increased tax rate will also apply to cannabis vaping products sold in the regulated market.
That would make legal products less competitive versus those sold in the illicit market, potentially keeping sales away from the watchful eye health regulators, experts warn.
Dried cannabis, extracts not for use in a vaping device, edible products, and topical marijuana products will be subject to the standard 7% provincial sales tax.
The tax will apply to all vaping products, including:
- Vaping devices.
- Cartridges, parts and accessories.
- Vaping substances.
The B.C. government says it will introduce legislation later this month.
The new rate will go into effect Jan. 1, 2020, pending a public comment period and legislative approval.
Edibles, extracts and topical cannabis products are expected to trickle into stores across Canada starting at the end of this year, but wider distribution is not expected until 2020.
GMP Securities analyst Martin Landry expects vape pens to eventually take up 20% of extracts sales, followed up by edibles (15%), beverages (10%) and other (5%).
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