The federal government’s 2026 Budget proposes streamlining the federal excise stamping program by reducing the number of unique cannabis excise duty stamps from 13 to six.
Budget 2026 outlines revisions to the current cannabis excise duty stamp framework. Under these proposed measures, a unified stamp would cover regions with identical tax rates, such as Québec, Nova Scotia, New Brunswick, British Columbia, Prince Edward Island, Newfoundland and Labrador, Yukon, and the Northwest Territories, while giving other interested jurisdictions an opportunity to opt in.
Participating provinces and territories must notify the Minister of Finance and National Revenue of their intention to join by January 31, 2027. Alberta, Saskatchewan, Ontario, and Nunavut, which also have Coordinated Cannabis Taxation Agreements with the federal government, would be invited to adopt the common stamp, and may indicate their desire to do so by the January 31, 2027 deadline.
Under the proposed timeline, licensed producers could start applying the unified stamp on January 1, 2028. Throughout a transitional period ending June 30, 2029, products headed for participating markets may carry either the unified stamp or the existing region-specific stamp when entering the commercial supply chain. After June 30, 2029, producers must use the unified stamp in those jurisdictions. However, inventory already in commercial channels bearing the legacy stamps may still be sold through wholesale and retail networks until December 31, 2029.
However, this would still not address some industry calls for cross-provincial sales. After entering a province or territory’s commercial supply chain, moving or shipping duty-paid products across borders, even those bearing a unified stamp, would remain largely restricted for commercial purposes.
Producers could, however, receive returned inventory carrying the common stamp and redistribute it into another participating jurisdiction. To do so, producers would have to declare the return and secondary sale while reconciling any tax variance through duty payments or applicable refunds.
Background
This proposed policy change reflects part of what the industry has been asking for for several years. Some in the industry have expected a proposed single, unified federal excise stamp to be included in Budget 2024 2025, but the issue was repeatedly sidelined.
The federal government imposes an excise duty on cannabis products of $1 per gram on cannabis products sold into the provincial and territorial retail systems, with 75% of that revenue shared with the province or territory. All provinces and territories signed this agreement, except for Manitoba, which collects and remits its own excise.
Ontario, Saskatchewan, Alberta, and Nunavut have agreements that adjust their share of excise duty based on differences in sales tax. Currently, licensed producers must buy and apply specific regional stamps and pay the exact tax rate for each destination before releasing products into retail channels.
Cannabis producers in Canada selling into these provinces and territories must buy and apply different stamps depending on where the products will be sold. Producers argue this costly, labour-intensive process could be streamlined.
Updated fines and penalties
The new federal budget also introduces two proposed penalties. The first is a civil fine set at twice the payable duty on any cannabis a licensed producer reports having in stock but cannot account for.
The second changes how fines and penalties are calculated for specific cannabis products. For violations involving the sale or distribution of unstamped edibles, topicals, and extracts, fines would equal two to three times the duty payable if the product had a THC concentration of: 10 milligrams per gram for cannabis edibles; 15 milligrams per gram for cannabis topicals; and 1000 milligrams per gram for cannabis extracts. This could enable stronger enforcement against those selling unlicensed products.
