In a market beset by supply bottlenecks and shortages, tax revenues appear to fall short of pre-legalization expectations
B.C.’s first hit from legal cannabis has fallen far short of the pre-legalization estimates written into last year’s budget.
“Given the associated costs, we do not expect substantial revenues from cannabis legalization,” said Finance Minister Carole James in an email response to Postmedia questions. Ministry staff said James wasn’t available for a follow-up interview.Costs that need to be absorbed include establishing B.C.’s regulatory framework, creation of a new community safety unit to enforce regulations, and establishing “a well-regulated non-medical cannabis retail system,” James said.
The $1.3-million payment to B.C., as a 75-per-cent share, implies that a total of $1.73 million in excise taxes were collected in the first 15 days of legal cannabis sales in the province, or an average of $5.37 per sale for the 32,277 transactions reported by the B.C. Liquor Distribution Branch. Cannabis in the legal market is selling for higher prices than the illicit market, according to consumer-reported figures being collected by Statistics Canada.
Details on total excise-tax collections are also scarce. Federal Finance Minister Bill Morneau’s office did not respond to Postmedia questions about payments to other provinces.
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