Pot producer WeedMD (CVE:WMD) says it will show support for its medical cannabis patients by absorbing increased tax costs.
Recently, the Canadian government announced it would impose excise tax of $1 per gram (or 10% of the sale price) on cannabis, which is scheduled to come into effect on October 17 this year.
"WeedMD is pleased to announce it will further support its medical-use customers by continuing to offer competitive pricing on its premium, medical-grade cannabis and that it will absorb the increased cost as a result of the excise tax," the group said Wednesday in a regulatory statement.
"Despite the fact that almost all prescription drugs are tax free in Canada, medical cannabis patients are being forced to pay the Excise Tax on their medicine," said Keith Merker, chief executive of WeedMD.
"WeedMD is proud to demonstrate support for our patients by implementing these cost-relief initiatives and putting our patients first.
"The reality is that many patients do not have the cost of their medicine covered by insurance and often struggle to afford their prescriptions. Adding an additional tax could put their treatment further out of reach."
WeedMD also said that with immediate effect, it will be offering free standard shipping on all medical cannabis orders with no minimums and no restrictions.
The company noted that it also remained committed to its compassionate pricing program which supports patients that require financial assistance.
It's been a busy week for the cannabis group. Yesterday, WeedMD revealed that Shoppers Drug Mart (TSE:L), with which it has a supply deal, had secured a cannabis production licence from Health Canada.
In June this year, the company announced it had struck an agreement to become a medical cannabis supplier to the firm - Canada's largest pharmacy chain.
This means Shoppers can receive, label and test medical cannabis supplied by WeedMD and represents an important milestone for both companies.
The firm will supply WeedMD-branded medical cannabis products to the group and it is expected that they will be sold online as Canadian regulations currently restrict the sale of medical cannabis in retail pharmacies.