Hemp Promotion-Research Levy Implemented

Summary#

The Canadian Industrial Hemp Promotion-Research Levies Order sets a levy on interprovincial sales and certain cross‑provincial processing of industrial hemp. It requires a 0.5% payment on the purchase price, collected and remitted to the Canadian Industrial Hemp Promotion-Research Agency. The Order came into force on August 4, 2026 and the main levy rule ends one year later on August 4, 2027.

What it does#

• Charges a levy of 0.5% on the purchase price of industrial hemp products listed in the Order when they are sold in interprovincial trade.
• Requires a producer to pay 0.5% when hemp is grown in one province but processed in another, based on the price the producer sets.
• Makes the buyer (the purchaser) responsible for deducting the seller’s levy at the first point of sale and remitting it to the Agency through a designated collector.
• Makes the processor responsible for paying the producer’s levy at the first point of processing and remitting it through a collector.
• Requires the purchaser or processor to give the seller or producer a document showing the purchase price and levy amount, and to submit a statement with contact details, weight (in kilograms), value, and levy amount when remitting.
• Requires records related to sales and processing to be kept for seven years and provided to the Agency on request.
• Holds both parties (buyer and seller, or processor and producer) potentially responsible if the other fails to collect or pay the levy.
• Section 3 (the levy rule) will cease to have effect on August 4, 2027 unless reviewed or replaced by the Agency.

Products covered include items listed in the Order’s schedule, such as various forms of hemp flower, leaf, stalk, seed (for sowing, processing, toasted/roasted/hulled), chaff, extraction biomass and screenings, and hemp root.

Who's affected#

• Producers (farmers or growers) of industrial hemp, especially when their crop is processed in a different province.
• Processors who first process hemp and must pay levies on behalf of producers.
• Sellers who ship or sell hemp products in interprovincial trade.
• Purchasers (buyers, dealers, agents) who must deduct and remit the seller’s levy at first sale.
• Collectors appointed by the Canadian Industrial Hemp Promotion-Research Agency to handle levy payments and statements.
• The Canadian Industrial Hemp Promotion-Research Agency, which will administer and enforce the levy and collect records.

Why it matters#

• It creates a small, predictable charge on interprovincial hemp transactions (only 0.5%). Businesses may pass this cost on in prices or absorb it as an administrative cost.
• Buyers and processors must add new steps to their paperwork and cash flows: deducting, documenting, remitting, and keeping records for seven years.
• If a buyer or processor fails to collect or remit the levy, the seller or producer can be required to pay instead, so businesses need to track compliance across trading chains.
• The levy is temporary as written: it only stays in effect for about one year from registration unless the Agency reviews and extends it.