Ontario, Canada’s most populated province, hopes to make a lot of money come legalization. They aspire to do this through cannabis tax revenue.
Ontario Finance Minister Charles Sousa is gearing up for a strong demand when cannabis becomes legal. He urges though that in order for that to happen, they will need to undercut the illegal markets prices.
“We need to price it in such a way as to be competitive with the illicit market, and that’s all-in — so if we’re looking at a wholesale price of C$7 or C$8, we’re going to be at more” Sousa says.
This means that cannabis prices will need to be at that price or lower after taxes. This is needed to stand a chance at competing with the black market. Canada’s representatives on this matter are expected to meet on December 11th. The focus appears to be on how the new cannabis tax will be split between provinces and feds.
via The Star
Cannabis Tax Split Still Under Negotiations
In an earlier event organized by the Toronto Board of Trade, it was mentioned by Sousa that the proposal to split the tax revenue 50/50 is not enough.
Another concern is exactly how they will supply the demand. If the legal market becomes as big as the black one, running short on supplies is a very real possibility.
“I’m being told that having sufficient supply may be more problematic than we thought. So when we get our stores out and we get our online ready, we’ve just got to make sure we have quality production and supply in the mix as well.” Sousa states.
The future of cannabis within Canada continues to be a hot topic, with many pointing out glaring flaws in Ontario’s plan. As things go on it is becoming increasingly clear that legalization is all about money. Thus, users may be in for some unpleasant surprises come 2018.