‘Dope tax’ of 20% if cannabis growing licensed

Such an industry could fall within the scope of the company higher income tax of 20% if the growing of the plant for the production of industrial hemp, food supplements or medicinal products becomes a ‘licensed activity’.

The possibility of such a tax has been raised in the proposed 2019 Budget. This could be seen by some as an indication that the development of a cannabis plant growing industry is being taken seriously at the highest levels of government – along with the revenue raising opportunities that it could present.

‘As part of the continued monitoring of the corporate tax regime, the Policy & Resources Committee has considered domestic developments in relation to the growing of cannabis plants for the production of industrial hemp, food supplements or medicinal products, etc,’ said the Budget.

‘Should this become a licensed activity, it would be the intention of the Policy & Resources Committee to recommend that it be brought within the scope of the company higher income tax rate (20%).’

David White, head of tax, Guernsey at EY Channel Islands, said: ‘If cannabis cultivation (and food supplements/medicinal products) becomes a licensed activity, there is a clear intention to bring such income within the scope of the 20% higher rate of tax. It remains to be seen whether we will be relaxed about this change.’

The potential tax on cannabis cultivation was also noted in Deloitte’s budget commentary for clients.

Health & Social Care has previously said it was exploring the opportunities of establishing a hemp and medical cannabis industry in Guernsey.

In August, a spokesman said the committee had been working with representatives of Economic Development in respect of opportunities to develop a licensed and regulated hemp and medicinal cannabis industry, recognising the potential economic benefits this may offer for Guernsey.