A taxing problem: how to price, tax legal weed to stamp out the black market
The policy goals — including stamping out the black market, reducing underage consumption or drumming up tax revenue — are often at odds with each other
National Post (Canada)
Tuesday, December 5, 2017
Tuesday, December 5, 2017
Stamping out the illicit market is one of Ottawa’s major goals as the country approaches a July 2018 deadline for the legalization of recreational marijuana — leaving politicians little time to lay out exactly how to sell, price and tax cannabis. As Washington state, which legalized recreational sales in 2014, has learned, pricing and taxation can heavily influence whether the black market blooms or shrivels. The state originally levied a 25 per cent tax on producer sales to processors, another 25 per cent tax on processor sales to retailers, and a further 25 per cent tax on retailer sales to customers. The high consumer costs, combined with a shortage of legal cannabis, fuelled the black market, according to analysts.
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