2026 Budget and Reform of Excise StampsCanada

The Canadian cannabis industry is responding with cautious optimism to recently announced plans to harmonize aspects of the federal cannabis excise stamp and create new enforcement tools.

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. It also includes increased financial penalties for those selling cannabis outside of the regulatory system. 

The cannabis industry has been calling for a single, unified federal excise stamp for several years, which had been expected to be announced as part of Budget 2024 and Budget 2025, but did not materialize. Some provinces, including British Columbia and New Brunswick, have also called for changes to the excise regime and more cross-provincial trade opportunities during their engagement with the federal government. 

Changes to penalties for those selling outside of the regulatory regime also reflect many stakeholder and community calls for better enforcement tools against those not following the rules. 

Industry has also been calling for the excise rate, which amounts to $1 a gram on cannabis wholesale into provincial markets, as well as on cannabis sold through the medical program. For cannabis extracts, the combined Federal flat rate is $0.01 per milligram of total THC. Provinces collect 75% of the total cannabis excise revenue from sales into their jurisdictions, from more than $5 billion in cannabis tax revenue in the first seven years of legalization. In 2024, the federal House of Commons Standing Committee on Finance recommended changing the rate from a flat fee to a 10% sales tax. 

James Yamanaka, CEO of Organigram Global, one of Canada’s largest cannabis companies, applauded the federal government’s announcement on cannabis excise stamp reform, calling it an important, welcome decision that signals a commitment to improving the competitiveness of Canada’s legal cannabis industry. Still, he says much more is needed to address industry demands. 

“Budget 2026 is a major step forward for Canada’s legal cannabis industry, and we’re pleased to see the federal government act on this longstanding issue,” Yamanaka told StratCann via email. “A common excise stamp will help cut unnecessary costs, reduce barriers to interprovincial trade and make Canadian producers more competitive. Full credit to the Carney government for listening to the industry and pushing forward with meaningful reform. This is a significant achievement that we very much welcome; however, there’s more work ahead, particularly on broader excise reform and a national strategy for cannabis exports.”

Yamanaka says that while industry would prefer a single national excise stamp, this change will still be a significant step forward by eliminating unnecessary costs for producers, simplifying inventory management, and making it easier for producers to move products between participating provinces and territories.

“And importantly,” he adds, “six may not be the final number. Ontario, Alberta, Saskatchewan, and Nunavut still have an opportunity to opt in, which would bring us down to just two stamps nationally. We strongly encourage all four to participate, but regardless, this is meaningful progress on an issue the industry has been advocating for over many years.”

Pierre Leclerc, President of the Quebec Cannabis Industry Association (AQIC-Association Québécoise de l’Industrie du Cannabis), told StratCann that the expected changes are welcome, but agrees much more is needed to address the challenges the industry faces.

“On the excise stamp reform, we certainly welcome the proposal,” said Leclerc. “AQIC has been advocating for a single national excise stamp for several years (since 2021), so reducing the number of stamps from 13 to six is clearly a step in the right direction.

“That said, it remains a partial solution. The objective should still be one national stamp, regardless of the province or territory where a product is sold. Producers already face significant regulatory and administrative costs, and maintaining different stamps for different markets adds unnecessary complexity to packaging, inventory management and distribution.”

He notes the organization is also supportive of the proposed penalties for unaccounted cannabis and unstamped products. One further change he says AQIC would like to see is moving excise duties to the provinces where cannabis is being sold, rather than requiring producers to pay them. 

“We believe this approach deserves serious consideration, as it could help simplify administration, ensure greater fairness among producers and better align tax collection with the actual distribution of cannabis products.”

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