Emblem will continue to advocate against the
application of any tax on medical cannabis
Emblem Corp. (TSXV: EMC, OTCQX:EMMBF) ("Emblem" or the "Company")
today announced that it will segregate CDN $5 million of its
current cash holdings to establish what it is calling the Patient
Access Investment Fund (the “Fund”), the interest from which will
be used to help offset some of the cost of the excise tax that will
be applied to medical cannabis products, effective October 17,
2018.
Federal and provincial governments to tax medical
cannabisOn October 17, the Access to Cannabis for Medical
Purposes Regulations (“ACMPR”) will be replaced by the Cannabis
Act, and all Licensed Producers will be required to collect and
submit a federal cannabis excise tax to the government. The
standard rate tax is the greater of $1.00/gram equivalent or 10% of
the purchase price, with some provinces requiring an additional
excise duty adjustment on top, which can range as high as 19.3%
(the “New Excise Tax”).
In response to the New Excise Tax, Emblem will implement a
$0.50/gram or equivalent increase to the prices of its medical
cannabis products on October 17, 2018 and will absorb the remainder
of the New Excise Tax over the $0.50 increase using interest from
the Fund, with any portions not covered by the interest generated
by the Fund being wholly absorbed by Emblem.
Patients are Emblem’s first priorityEmblem will
continue to advocate against any tax on medicine and support
organizations such as Canadians for Fair Access to Medical
Marijuana (“CFAMM”) in their work to remove taxes from medical
cannabis.
“Patients are our first and foremost priority and we stand
together with them to advocate for the removal of taxes from
medical cannabis. We believe that failing to do so will render this
medicine less affordable, preventing vulnerable patients from
accessing their physician-authorized medication,” said Nick Dean,
CEO, Emblem Corp. “Until a time when the government decides to
treat medical cannabis equitably to other medications, Emblem will
cover the portion of the tax that is not covered through the retail
prices changes on behalf of patients through the Patient Access
Investment Fund.”
Cannabis already the only medicine subject to
HST“No other prescription medication in Canada is subject
to tax. In fact, medical cannabis is already the only medicine
subject to HST,” said James O’Hara, President and CEO of CFAMM.
“The tax adds a significant financial burden to already-struggling
patients and further marginalizes those managing a health
condition. It increases the stigma that can come with using medical
cannabis. Furthermore, it defeats the purpose behind the
government’s often-stated position of driving purchases away from
the black market.”
Another challenge for patients is that cannabis does not yet
qualify for coverage by most private or government health insurance
policies, so many patients are paying 100% out-of-pocket for their
prescribed medication.
“Our message to patients is that we are all in this together. We
are proud to support our patients during what we hope is only a
temporary period of governments imposing an additional tax on
medicine,” said Dean. “Canada needs the marketplace for medical
cannabis to remain competitive to ensure adequate product choice
for patients. A continued tax on medical cannabis is
unsustainable in a competitive market, and in the end, patients
will be hurt through reduced access to a wide variety of medicinal
cannabis products. We encourage patients to join us in advocating
to the federal government that medicine should not be taxed.”
About the Emblem Patient Access Investment
FundThe Fund is a CDN $5 million professionally-managed
investment account, from which generated interest will be directed
to covering the New Excise Tax applied to the Company’s medical
cannabis products over the $0.50/gram equivalent that will be
passed on to Emblem patients in the October 17, 2018 price update.
The remaining portion of the New Excise Tax will be covered by
Emblem, including any amounts required to be paid over and above
the interest generated by the Fund.
Emblem is hopeful that the government will remove the excise tax
on products sold to registered patients in the near future, at
which time the Company will redirect the money in the Fund back
into its working dollars, where it can be redeployed towards its
primary intended purpose of supporting medical product development
and innovation.
About Emblem Emblem, through its wholly-owned
subsidiary Emblem Cannabis Corporation, is a fully integrated
licensed producer and distributor of medical cannabis and cannabis
derivatives in Canada under the ACMPR Emblem's
state-of-the-art indoor cannabis cultivation facility and research
and development laboratory is located in Paris, Ontario. Led by an
experienced management team of healthcare executives, accomplished
marketing professionals, and cannabis experts, Emblem is focused on
driving shareholder value through product innovation, brand
relevance, and access to patient and consumer channels. Emblem is
also the parent company of GrowWise Health Limited, one of Canada's
leading cannabis education services. Emblem trades under the ticker
symbol EMC on the TSX Venture Exchange.
For more information, please visit www.emblemcorp.com.
For media inquiries, please contact:
Morgan Cates H+K Strategies 416.413.4649
Morgan.cates@hkstrategies.ca
For investor inquiries, please contact:
Ethan Karayannopoulos Investor Relations Emblem
Corp. 647.748.9696 ethank@emblemcorp.com
Alex Stojanovic Chief Financial Officer Emblem Corp.
416.923.1331 alexs@emblemcorp.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION This news release contains certain
forward-looking statements and forward-looking information
(collectively referred to herein as "forward-looking statements")
within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
"anticipate", "achieve", "could", "believe", "plan", "intend",
"objective", "continuous", "ongoing", "estimate", "outlook",
"expect", "may", "will", "project", "should" or similar words,
including negatives thereof, suggesting future outcomes. Management
of the Company believes the expectations reflected in such
forward-looking statements are reasonable as of the date hereof but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements should not be unduly
relied upon. Various material factors and assumptions are typically
applied in drawing conclusions or making the forecasts or
projections set out in forward-looking statements. Those material
factors and assumptions are based on information currently
available to the Company, including data from publicly available
governmental sources as well as from market research and industry
analysis and on assumptions based on data and knowledge of this
industry which Emblem believes to be reasonable. However, although
generally indicative of relative market positions, market shares
and performance characteristics, such data is inherently imprecise.
While Emblem is not aware of any misstatement regarding any
industry or government data presented herein, the medical marijuana
industry involves risks and uncertainties and is subject to change
based on various factors.
Forward-looking statements are not a guarantee of future
performance and are subject to and involve a number of known and
unknown risks and uncertainties, many of which are beyond the
control of the Company, which may cause the Company's actual
performance and results to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include,
but are not limited to, the risks identified in the Company's
December 31, 2017 Management's Discussion and Analysis, which has
been filed with the Canadian Securities Administrators and
available on www.sedar.com. Any forward-looking statements are
made as of the date hereof and, except as required by law, the
Company assumes no obligation to publicly update or revise such
statements to reflect new information, subsequent or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
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