Pubdate: Sat, 08 Sep 2012
Source: Victoria Times-Colonist (CN BC)
Copyright: 2012 Times Colonist
Author: Jeff Bell


Leader Hopes to Foot Bill Himself

The tax man has come knocking at the door of the Cannabis Buyers Club 
of Canada, and its founder said there will be full compliance from 
the organization.

Ted Smith, who has run the club for more than 16 years, said it now 
has a tax bill of more than $147,000 from the Canada Revenue Agency 
for unpaid HST in the first six months of this year.

"We started to collect HST here in the store around July 28. So, for 
over a month now, we've actually been giving out receipts and 
collecting HST that we are going to remit to the government."

He said the club has about 4,000 clients who come to the small 
storefront on Johnson Street for medical marijuana to help treat 
various kinds of pain and illnesses.

The new tax reality is bringing structural changes to the operation, 
Smith said.

"Part of this transformation, of being in compliance with the tax 
laws, is creation of a new, non-profit society," he said. "It's going 
to be called the original name of this group, the Victoria Cannabis 
Buyers Club."

That means ownership will be transferred to the non-profit in the 
near future, he said, adding that the sale price will be $420 - a 
reference to 4/20, a slang term that refers to cannabis culture.

After selling the club, Smith said he will earn his livelihood from 
such things as sales of his newly published textbook Hempology 101: 
The History and Uses of Cannabis Sativa.

Smith said he doesn't have the personal resources right now to pay 
the tax bill, but he hopes that creating a non-profit society will 
shift the burden of the current tax bill to him.

"I don't want the club to be held accountable for essentially my 
mistakes here. It doesn't seem fair or reasonable to go after the 
non-profit group when it's my bill and something that I'm responsible for."

As for his personal resources, Smith said he has been taking home 
about $24,000 a year but remains optimistic he can find a way to deal 
with the taxes.

"We'll see in the future, if I sell enough books and the donations 
come in, maybe I can afford to make payments on a bill like that."

He said he has established a good rapport with the taxation office 
and will be talking to a staff member next week. Confidentiality 
rules prevent the Canada Revenue Agency from commenting on specific cases.

Smith said taxation officials began taking a closer look at the club 
during a court case involving colleague Owen Smith (no relation) for 
his work as a baker with the club.

Owen Smith was charged with trafficking and unlawful possession of 
marijuana after making cookies and skin products from the substance 
in a downtown apartment building.

Judge Robert Johnston was hearing the case and ruled in April that 
restricting the use of medical marijuana to only its usual dried form 
is unconstitutional. He gave Health Canada a year to respond. Owen 
Smith will be back in court in early 2013.

The city has another medical-marijuana group called the Vancouver 
Island Compassion Society.

On the national level, the Canadian Association of Medical Cannabis 
Dispensaries has obtained a legal opinion that says GST and HST 
should not be charged to medical-marijuana patients, president Rade 
Kovacevic said.

"We've been working on trying to get clarification on this, so that 
dispensaries can be following the legislation as needed - as well, 
though, so that patients aren't paying taxes that they may not have to."
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MAP posted-by: Jay Bergstrom