Canada enacts mandatory 0.5% hemp levy to fund research, promotion and market development

# What changed

Canada has implemented a mandatory hemp levy of 0.5% on certain hemp transactions. The levy started last month after the Farm Products Council of Canada approved an order. Funds collected will be paid to the Canadian Industrial Hemp Promotion‑Research Agency, which operates as Hemp Canada Chanvre (HCC).

# Why the levy was introduced

The levy creates a stable, formal funding mechanism for national research, promotion and market‑development activities. Until now the sector relied largely on voluntary contributions, membership revenue and government grants. HCC was created in November 2024 to coordinate national funding and activities across the supply chain.

# Which products and transactions are covered

The order applies to hemp products sold in interprovincial trade and to hemp produced in one province and sent to another for processing. Specific items covered include planting seed, grain, stalk, flower, leaf, extraction biomass and several other raw and intermediate products used in processing and manufacturing.

# How the levy is collected and paid

# Financial scale and timeline

Committee that proposed HCC estimated initial annual levy revenue at about C$200,000 (roughly US$145,000). They said revenue could rise above C$400,000 (roughly US$290,000) over time if hemp acreage, production and prices increase. The levy provision is set to expire on Aug. 4, 2027, giving HCC one year to establish collection systems, decide how revenue will be allocated, and begin investing in eligible projects.

# Roles and governance

HCC functions as a promotion‑research agency under Canada's Farm Products Agencies Act. Its board represents hemp producers, importers and supply‑chain participants. Named leaders include Will Van Roessel (chairman), Reuben Stone (vice chairman) and Syeda Khurram (executive director). HCC and the Canadian Hemp Trade Alliance (CHTA) are expected to work closely: HCC will fund eligible research and market development, while CHTA may carry out programs and share some operational resources.

# Practical implications for businesses and growers

Producers and processors that sell or move hemp across provincial lines should expect the 0.5% deduction at the first point of sale or processing. Businesses should confirm who the appointed collector is and adjust invoicing and cash‑flow planning to account for the levy. The one‑year implementation window means HCC will set operational rules and allocation priorities during that period.

# What comes next