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Canada: Revenue Agency Confirms Medical Marijuana As Allowable Medical Expense

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The Canada Revenue Agency has officially confirmed that medical marijuana to be purchased by an individual patient from a licensed producer under Health Canada's Marihuana for Medical Purposes Regulations (MMPR) is an allowable medical expense under the Income Tax Act.

The Canadian Medical Cannabis Industry Association (CMCIA) on Tuesday announced it has received a letter from the CRA, dated August 24, confirming that registered patients under the MMPR who receive a prescription (authorization) for medical cannabis from a physician, and purchase cannabis from a licensed producer, may claim the cost of their marijuana as an allowable medical expense on their income tax.

Specifically, the letter notes that while amendments to the Income Tax Act have yet to be introduced to recognize the MMPR, "[T]he CRA will not disallow eligible medical expenses claimed for the purchase of medical marihuana allowable under these new regulations."

Allowable medical expenses under the Income Tax Act currently include prescription medicines lawfully acquired for use by an individual, when prescribed by a medical practitioner. Non-prescription or over-the-counter drugs cannot be claimed, even when recommended by a physician.

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