2015-0588751E5 Medical marihuana - METC

Principal Issues: Does the cost of marihuana purchased by an individual from a Licensed Producer under the Marihuana for Medical Purposes Regulations qualify as an allowable medical expense under the Income Tax Act.

Position: See response.

Reasons: See response.

Author: Robertson, George
Section: 118.2(2)(u)

August 24, 2015

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                                            2015-058875
                                            G A Robertson, CPA, CMA

Dear XXXXXXXXXX:

Re:   Medical marihuana and the medical expense tax credit

We are writing in response to your email of May 22, 2015, requesting our comments on whether the cost of marihuana purchased by an individual from a licensed producer under the Marihuana for Medical Purposes Regulations would be an allowable medical expense under the Income Tax Act (the “Act”).

As you point out, certain expenses associated with the purchase of medical marihuana were eligible for the medical expense tax credit under paragraph 118.2(2)(u) of the Act, which currently references the Marihuana Medical Access Regulations. These regulations were repealed and as of April 1, 2014, a new regime for access to medical marihuana is in force under the Marihuana for Medical Purposes Regulations (“MMPR”).  You state that through the MMPR, doctors can prescribe medical marihuana to their patients. Patients can then access medical marihuana by purchasing it from a licensed producer that has been authorized under the MMPR.

Our Comments

This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.

While a technical amendment to paragraph 118.2(2)(u) of the Act has yet to be introduced to recognize the MMPR, the Canada Revenue Agency will not disallow eligible medical expenses claimed for the purchase of medical marihuana allowable under these new regulations. We recognize that paragraphs 1.139 to 1.142 of Income Tax Folio S1-F1-C1: Medical Expense Tax Credit, refer to the repealed regulations.  These paragraphs will be changed to reflect any technical amendment to paragraph 118.2(2)(u) once such an amendment has been proposed.

We trust our comments will be of assistance.

Yours truly,

Pamela Burnley, CPA, CA
Manager - Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

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