CRA Says That Cannabis is a Valid Medical Expense

The Canadian Medical Cannabis Industry Association (CMCIA) announced today that the Canada Revenue Agency (CRA) has officially confirmed that medical cannabis purchased from a licensed producer under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR) is claimable as a medical expense under the Income Tax Act.

The CRA sent the CMCIA a letter, dated August 24, 2015, confirming that registered patients under the MMPR who receive authorization from a physician, and purchase cannabis from a licensed producer, “may claim the cost of their cannabis as an allowable medical expense on their income tax.”

While amendments to the Income Tax Act haven’t been made that would recognize the MMPR, “[T]he CRA will not disallow eligible medical expenses claimed for the purchase of medical marihuana allowable under these new regulations,” said the letter.

“This is an important step in acknowledging the legitimacy of the way patients use medical cannabis, to help manage the symptoms of a range of health conditions,” said Neil Belot, Executive Director of the CMCIA. “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. It’s very good news, and will help make the use of cannabis as medicine more accessible and affordable for patients.”