Pubdate: Thu, 23 Mar 2017
Source: Chronicle Herald (CN NS)
Copyright: 2017 The Halifax Herald Limited
Author: Andrea Gunn


Anyone hoping for major hints about the government's plans to
legalize, regulate and tax cannabis in Wednesday's federal budget
likely came away disappointed.

Cannabis is mentioned just twice in Budget 2017 - the first time to
direct existing Health Canada funding of $9.6 million over five years,
with $1 million per year ongoing, to support "marijuana public
education programming and surveillance activities" ahead of legalizing
the drug for recreational use.

The second time, in a section that deals with raising duty rates on
alcohol, the budget says as the government moves forward with a new
taxation regime on cannabis, "it will take steps to ensure that
taxation levels remain effective over time."

Though they've been hush-hush on the details, Health Canada confirmed
Tuesday that the government still intends to move to legalize,
regulate and tax marijuana this spring. But though some have
generously predicted billions of dollars in annual revenue, the
Parliamentary Budget Officer estimates a more modest $400 million-$900
million, depending on usage and tax rates.

Introducing legislation only kicks off the legalization process,
however, and it will likely take months of debate and parliamentary
process before you'll be able to legally purchase pot on Canadian
shelves. With the House rising for more than two months during the
summer, it's unlikely legislation will pass until at least 2018.

David Brown, communications director and editor of, a Canadian
online medical marijuana marketplace and advocacy community, told the
Chronicle Herald Budget 2017's funding allocation to roll out
education efforts is a positive step toward the Liberals' campaign

"One of the concerns from the government is that they need to get
proper messaging out there about both the harms and benefits of
cannabis and education to the general public," Brown said.

"Awareness campaigns are a big part of the legalization effort; (this
funding) could be seen as the first wave of this very long and
complicated process."

Health Canada would not provide any additional details on what that
education campaign might entail.

The Arthritis Society and Canadians for Fair Access to Medical
Marijuana issued a joint statement Thursday expressing disappointment
with the lack of funding for research into medical cannabis in Budget
2017, and urging the government to utilize some of that $9.6 million
in funding towards specific education about the therapeutic aspects of
cannabis for patients struggling with chronic pain and other health

Both groups are also asking the government to eliminate the federal
sales tax on medical marijuana.

"The failure to invest in long-overdue research, or to address the
inequitable tax status of medical cannabis, raises questions about the
government's commitment to addressing the needs of Canadians living in
pain," said Janet Yale, president and CEO of The Arthritis Society in
the statement.

How recreational cannabis will be taxed - and what kind of revenue it
will add to government coffers - has been a regular source of
discussion in the legalization debate.

Brown said the government will have to strike a delicate balance in
how it taxes weed.

"If you want to get into the meat of the policy, governments have been
really hesitant to talk about taxes. They've been told one of the
problems with U.S. states is taxing it too high in the beginning,
which allows the black market to thrive," he said. "That's why you
have that line in there about taxes and sustainable tax measures -
they don't want to tax it so high it means legal cannabis can't
compete with the black market, and they don't want to set it so low
that it's not able to cover different costs of managing the system."

A federally appointed task force on legalizing marijuana completed a
report in November with more than 80 wide-ranging recommendations for

On taxation, it suggested government conduct economic analyses to come
up with a taxation scheme that balances health protection with the
goal of reducing black market sales, create a system that can adapt
tax to marketplace changes and, like alcohol, is based on potency, and
work with provincial governments to determine a tax regime that
includes the equitable distribution of revenue.

With legislation not even the books yet, it's not surprising Ottawa is
steering clear of projecting any revenue from marijuana sales, but one
only needs to look at alcohol and tobacco to see what a
revenue-generator taxing our vices can be for government.

But Brown said while sales have been lucrative for medical
dispensaries that have already popped up - he said some shops average
thousands of sales each day - the government doesn't want to
overestimate revenues ether.

"There have been a ton of estimates from different think-tanks that
tend to throw out really big numbers," Brown said,

Speaking with media following a caucus meeting on Thursday, Nova
Scotia finance minister Randy Delorey would not provide details of any
discussions the province's working groups on marijuana have had with
Ottawa regarding taxation.

"At this point the legislation hasn't been introduced by the federal
government. When that comes in we will have the opportunity to know
with certainty what the framework is going to look like and what will
be available," Delorey said.

"Until that time, we will continue to have discussions with the
federal government and our working groups."
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