Doobie-ous tax bill mellows out Victoria marijuana club

Canada Revenue Agency hits medicinal marijuana provider with $150,000 HST bill

A Victoria medicinal marijuana club is being forced to pay $150,000 in backdated taxes on its estimated $2.5 million in annual sales.

Canada Revenue Agency began investigating the Cannabis Buyers’ Club of Canada and owner Ted Smith in early May, after he admitted in a B.C. Supreme Court case that he had not been paying taxes or employee deductions.

“Honestly, I’m just happy I’m not going to jail,” said Smith, who has operated the club for 16 years in Victoria.

“In a way, this is kind of a step towards legitimacy for us.”

Smith won the court case in April, which struck down a section of federal regulations that made the sale of edible marijuana and other products to medicinal users illegal.

As part of his evidence, he admitted the club had been avoiding tax payments.

“The police actually took that judgement to the CRA and they started investigating me from there,” Smith said, adding he will pay the tax bill out of his own pocket and separate himself from future club business.

“I’m going to be left with this mortgage-like debt, but the club’s not going to be affected,” he said.

Smith is currently in the final stages of appointing a board of directors with the intention of converting the club into a non-profit society.

Two committees on incorporation and finance are already working to ensure the new organization operates completely within the law, Smith added.

“We’ll be a lot more transparent, a lot more accountable. It’s a step we’ve been looking to do for a long time,” he said.

“I can live with a $150,000 debt. But I haven’t done anything criminal here at all, I’ve just not been in compliance.”

Smith hopes to use some proceeds from his recently published book, Hempology 101: The History and Uses of Cannibis Sativa, to help pay the massive tax bill.