Will Canada Legalize Cannabis Soon?
OTTAWA – Prime Minister Justin Trudeau said that a proposal to place a federal tax on marijuana will help efforts to legalize recreational weed in Canada on Tuesday. The Canadian government has plans to make recreational weed legal in July of 2018.
The proposed tax would be $1 per gram of cannabis on up to 10 grams. A 10 percent federal tax would be placed on sales over 10 grams. The Prime Minister said that legalizing recreational marijuana will eliminate the black market and decrease crimes associated with drugs. The federal tax money raised would be split 50-50 between the provinces and the federal government. Provinces are upset over the equal sharing of tax revenues being proposed. They say that because the provinces will be liable for increased law enforcement and distribution preparation costs, that they should get the lion’s share amount of tax proceeds.
“I heard loud and clear the concerns coming from the provinces that are worried about the costs,” Trudeau said to reporters at a news conference after speaking with the Premiers of several provinces. The Premier of Manitoba Brian Pallister said that because they do not yet know how much revenue there will be that instead of splitting profits, provinces may end up splitting costs. Quebec Premier Philippe Couillard and Nova Scotia Premier Stephen McNeil added that prices had to be low enough to be competitive with black market dealers, which may result in modest profits.
Cannabis companies, however, are delighted with the idea. Legal marijuana retailers will benefit the most from legal recreational pot. One of Canada’s biggest medical marijuana companies is Canopy Growth Corporation. The company has seen shares rise since the announcement, as did Aphria, Inc., a cannabis business in Ontario, and Aurora Cannabis Inc. The Parliamentary Budget Office estimated that tax revenue from pot sales will generate $618 million annually once legalization takes place
