John McCallum

Trudeau Supports 10% Tax on Legal Cannabis Sales

Canadian Prime Minister Justin Trudeau has proposed levying a C$1 tax (80 cents USD) on adult use cannabis sold for up to C$10 a gram, and a 10 percent tax on cannabis sold for more than that, according to a report from Bloomberg. Half of the tax revenues would go to provincial governments and half to the feds.

Trudeau indicated that the proposed rate would be low enough compete with the illicit market and the legalization measure is not about revenues but rather to protect children from street dealers.

“Nobody’s mindset on this approach is about bringing in tax revenue,” Trudeau said in the report.

However, Nova Scotia Premier Stephen McNeil would rather the provinces get the “lion’s share” of the cannabis tax revenues because provincial leaders are shouldering the regulatory burden.

According to Cam Battley, the executive vice president of Aurora Cannabis Inc., illegal cannabis runs about C$8 to C$10 throughout the nation. Battley called the prime minister’s plan “reasonable,” adding that it would not be a “barrier” for legal producers to compete with street sales.

“It’s in all of our minds that that’s a critical objective to carve away the black market,” Battley told Bloomberg.

The federal adult-use cannabis sales program is expected to commence in July.

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