Feds can’t have regulated pot and high revenues: analysis
Posted April 11, 2017 8:42 am.
This article is more than 5 years old.
OTTAWA, ON. (NEWS 1130) – A new analysis says the Trudeau government has a choice when it comes to marijuana legalization, it’s either regulation or large revenues but apparently it can’t do both. This comes just days before the legislation to legalize pot is tabled in the House of Commons.
If you want to keep proceeds away from criminals, then don’t expect a financial windfall. That’s the message from the CD Howe Institute, which finds in the first year of legalization under the current tax structure, marijuana would bring federal and provincial governments approximately $675 million in revenue which really isn’t much in the grand scheme of things.
They could make about $1 billion if they raise taxes but Policy Analyst Rosalie Wyonch says a higher price would drive people back to the black market. “The federal government can choose either the regulated market or large amounts of tax revenue but not both.”
However, the institute says if governments choose to boost taxes on weed, they risk pricing out customers who will go to the black market, meaning cash would continue to flow to organized crime. The study also warns if the price point is too low, it encourages marijuana use.
The federal government has long said it is legalizing the drug in order to keep it out of the hands of children and profits out of pockets of gangs.
The legalization bill is expected to be tabled on Thursday.
