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Legalizing marijuana won't be quick or easy: US policy advisor

(iStock Photo)

Governments have several options when it comes to taxing legal pot

Ad valorem tax getting the most attention stateside in collecting revenue for marijuana

VANCOUVER (NEWS 1130) – It is one of the first challenges the Trudeau government will have to address after it takes power next month, but one policy advisor from the US says legalizing pot won’t be a quick or easy process.

The RAND Drug Policy Research Center has worked with several of the states that now allow legal bud and co-director Beau Kilmer says there are many issues to consider.

“With taxes, for instance, governments have a number of options. The option that gets the most attention here in the States is an ad valorem (according to value) tax,” Kilmer tells NEWS 1130. “While it’s really easy to impose, as prices go down over time then they may be collecting less tax revenue.”

Taxing by weight is another option which is being implemented in Alaska.

“While that is easy to apply, it creates incentives for producers to grow more potent marijuana and for consumers to purchase more potent marijuana. There can be public health implications associated with that,” he says.

“Another option that doesn’t get as much attention as it should is taxing marijuana as a function of its THC level, similar to how some jurisdictions deal with alcohol — different taxes for beer versus wine versus spirits.”

It would take more work for the government to impose a tax on potency, coming up with regimes and testing for THC levels, but Kilmer believes it is the best option from a public health perspective.

Working out what business models to allow may also be a challenge for Ottawa.

“Within the US, there have been five jurisdictions that have removed the prohibition on marijuana for adults. Four — Colorado, Washington, Oregon, and Alaska — are actually allowing for-profit companies to come in and begin producing and selling marijuana. One of the concerns with that commercial model is that you will have a lot of advertising and marketing,” explains Kilmer.

“You have to keep in mind that a small number of users who account for most of the consumption — 20 per cent of the users account about 80 per cent of the consumption — and if you allow for profit companies to get involved, they are going to target those heavy users.”

Kilmer says the most important thing Canada could learn from the United States when legalizing marijuana is that there are many models and each should be considered carefully.