Pubdate: Fri, 29 Jan 2016
Source: Globe and Mail (Canada)
Copyright: 2016 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Author: Bruce Cheadle
Page: S4
Referenced: http://mapinc.org/url/M8hr2Qpz

GOVERNMENT REVENUE FROM LEGAL POT COULD REACH $ 5-BILLION A YEAR:
ECONOMIST

Call it Prime Minister Justin Trudeau's secret stash.

A new report from CIBC World Markets says Canada's federal and
provincial governments could reap as much as $ 5- billion annually in
tax revenue from the sale of legal marijuana.

CIBC economist Avery Shenfeld crunched the numbers using current
estimates of Canadian recreational pot consumption, the revenue
experience in U. S. states that have legalized marijuana and other
factors - such as prevailing "sin tax" rates on alcohol and tobacco.

"The bottom line is that federal [ and] provincial governments might
reap as much as $ 5- billion from legalization, but only if all the
underground sales are effectively curtailed," Mr. Shenfeld wrote.
"That's on the order of 0.25 per cent of GDP, no barnburner."

The Liberal government has promised to legalize, tax and regulate
marijuana and has made MP Bill Blair, the former Toronto police chief,
the lead on investigating a new regulatory model. Mr. Trudeau
maintains that legalized pot will not be a cash cow, and that all
revenue will be used to address mental health and addictions issues.
"It was never about a money-maker, it was always about public health,
public safety," the Prime Minister said in December.

The experience of Colorado and Washington states, where pot sales were
legalized and taxed, suggests no dramatic increase in marijuana usage
but a potential for pot tourism. "The desirability of increased
marijuana tourism inflows will be questioned, no doubt, but they would
generate additional fiscal revenues for government on their other
tourist spending," Mr. Shenfeld wrote.

The report uses Colorado sales figures to estimate a Canadian pot
market worth about $ 10- billion annually, then looks at net profit
margins from Ontario's government booze monopoly and other associated
income and payroll taxes to come up with the revenue total. Mr.
Shenfeld also suggested that the oft-touted law-enforcement savings
from pot legalization may not materialize due to ongoing international
obligations to stop marijuana exports and the enforcement needed to
curb the black market.
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MAP posted-by: Matt