Pubdate: Thu, 20 Jul 2017
Source: Winnipeg Free Press (CN MB)
Copyright: 2017 Winnipeg Free Press
Page: A6


PREMIER Brian Pallister has shown great determination for tightening
Manitoba's belt. But he's had less success finding new revenue to
fatten the province's wallet.

For a premier who has unleashed a wide array of tough-love measures he
says are necessary to return Manitoba to fiscal stability, Mr.
Pallister has been surprisingly quiet about legalized marijuana as a
potentially rich source of new revenue.

At a meeting of premiers in Edmonton this week, Pallister repeated his
pitch for an extension of the federal government's July 1 deadline for
legalization, saying provinces need more time to deal with tricky
issues such as distribution, sales, a minimum age and drugged-driving

On Wednesday, his concerns gained some support, but not all premiers
are as eager to postpone this new revenue. New Brunswick Premier Brian
Gallant said legalized cannabis could be an "economic opportunity" for
his province.

Financial consultants agree. A report last year from CIBC World
Markets said Canada's federal and provincial governments could reap as
much as $5 billion annually in tax revenues from the sale of legal

A report eight months ago from Canada's Parliamentary Budget Officer
wasn't as enthusiastic, suggesting initial revenue for governments
from taxation could be in the hundreds of millions of dollars, rather
than billions. But the analysis suggests those revenues are likely to
increase as the market grows and production costs for the industry

In Colorado, which legalized marijuana about three and a half years
ago, the industry was worth US$1.3 billion last year, bringing the
state US$200 million in tax revenue.

While Mr. Pallister's desire to successfully manage the many impacts
of legalizing marijuana is understandable, even commendable, there's a
danger of lost revenue potential if Manitoba moves more slowly than
other provinces.

Federal officials have said Ottawa will likely approve an expanded
mail-order system to supply recreational marijuana to customers in
provinces that don't have a sales network in place by July 1. That
would mean money spent by Manitobans on marijuana would leave the
province and, once they're used to buying by mail, customers in this
province might continue to do so even after Manitoba is belatedly open
for bud business.

Also, if Manitoba is slow in setting up shop, sellers in Kenora, Ont.,
and Moosomin, Sask., might be happy to sell to visiting Manitobans,
once again robbing the Manitoba treasury of revenue Mr. Pallister so
desperately needs.

Mr. Pallister and his team should ensure Manitoba marijuana outlets
are open for business as soon as pot becomes legal. To meet the
deadline, they can lean on the experience of eight U.S. states that
have already legalized it, using these examples to devise the network
of distribution and sales that will work best for Manitoba. After the
stores are open, Manitoba's marijuana laws and systems can be
fine-tuned as necessary, in the same way that Manitoba's alcohol laws
have often changed with the times.

In the April 2016 provincial election, Manitobans elected a skilled
entrepreneur who knows how to start from nothing. In private industry,

Mr. Pallister began his business career by working out of his car,
eventually building a highly successful financial-services firm.

With marijuana about to become big business, Manitoba is fortunate to
have a premier who has the business acumen to get the best deal on
behalf of the Manitoba treasury. He should see this challenge as an
opportunity, not a burden.

Marijuana is a growth industry, in more ways than one.
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