Pubdate: Thu, 15 Dec 2016
Source: National Post (Canada)
Copyright: 2016 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Anindya Sen
Page: FP9

POT REPORT ON THE HAZY SIDE

The federal government has just released the report of its special
advisory task force on marijuana legalization. While the report lays
out broad strokes, key decisions remain on retail distribution, legal
age limit, and taxation that Ottawa and the provinces should agree on
soon.

The report recommends that provinces be given the jurisdiction to
determine the precise mechanism of retail distribution. However, the
report has also recommended against allowing the sale of marijuana in
stores that also offer liquor and/or cigarettes. This is consistent
with my own study that was released by the C.D. Howe Institute, in
which I recommended retail sales through stand-alone stores as opposed
to government-owned retail outlets, as is the case in Ontario. Ontario
Premier Kathleen Wynne has supported the idea of the provincially
owned LCBO distributing marijuana. The idea has also received
considerable support from the trade unions representing LCBO
employees. A supporting argument is that selling marijuana through
LCBO outlets reduces the possibility of underage consumption.

In this respect, the task force has certainly made a sound economic
and health policy recommendation. First, there is no reason why the
province could not extract revenue from marijuana sales through a
wholesale mark-up, without the associated costs of being involved in
the actual sale of the product. Second, allowing the sale of marijuana
side by side with liquor raises the legitimate concern that buyers may
be incented to treat the consumption of both goods as complementary.
>From a public health perspective, this is certainly not advisable.
Neither Colorado nor Washington permits the sale of marijuana through
liquor outlets. Third, it is difficult to believe that independent
stores would not perform an adequate job of verifying legal age limits
if the penalty is suspension of the retailer's sales permit, implying
significant economic losses.

However, the task force's proposed legal age limit of 18 raises some
valid concerns. The task force has acknowledged that a higher age
limit of 19 is possible if a province wishes to harmonize marijuana
regulation with corresponding alcohol minimum ages. On the other hand,
the federal government should consider an even higher national legal
consumption age for marijuana, possibly at 21 years of age. Such a
policy would reflect the scientific consensus that early consumption
by retaining some element of criminal code provisions relating to drug
trafficking and sales.

A key policy tool to restrict youth access would be through high
taxes. However, as correctly noted by the task force, high taxes would
result in the creation of a lucrative black market and defeat a
critical objective of legalization. Apart from observing that higher
taxes should be levied on products with higher potency, the task force
did not make any recommendation on tax structure or on possible tax
rates. Ottawa should strongly consider a sales tax that is a per cent
of the sale price as opposed to an excise tax based on grams of
purchase. The advantages of sales taxes is that they do not have to be
set considering a possible market price and can be employed even when
it is difficult to tax specific quantities.

In general, while the report does make several recommendations, it is
a bit imprecise on policy specifics on some rather key points of
retail distribution, minimum age of purchase and taxation.

Anindya Sen is professor of economics and director of the Master of 
Public Service Program at the University of Waterloo, and a C.D. Howe 
research fellow.
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MAP posted-by: Matt