The Canada Revenue Agency (CRA) has confirmed that, under the right circumstances, cannabis now qualifies as an allowable medical expense under the Income Tax Act.
The Canadian Medical Cannabis Industry Association(CMCIA) says it has received a letter from the CRA which confirms that medical cannabis purchased from a licensed producer is an allowable medical expense under the Income Tax Act.
The letter states that patients who are registered under Health Canada‘s Marihuana for Medical Purposes Regulations (MMPR) and who have been prescribed medical cannabis by a physician may now claim the cost of the drug as an allowable medical expense on their income tax returns. Although amendments to the Income Tax Act have not yet been introduced to recognize the MMPR, the letter indicates that the CRA “will not disallow eligible medical expenses claimed for the purchase of medical marihuana allowable under these new regulations”.
“We have been working with the CRA and the Department of Finance for several months to clarify this issue, and we’re extremely pleased that cannabis regulated by Health Canada has been recognized as an allowable tax expense,” says CMCIA executive director Neil Belot. “It’s very good news, and will help make the use of cannabis as medicine more accessible and affordable for patients.”