Emblem will continue to advocate against the
application of any tax on medical cannabis
TORONTO, Oct. 15, 2018 /CNW/ - 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
cannabis
On 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 priority
Emblem 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
Fund
The 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.
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.
SOURCE Emblem Corp.