Pubdate: Fri, 10 Nov 2017
Source: Winnipeg Sun (CN MB)
Copyright: 2017 Canoe Limited Partnership
Author: Tom Brodbeck
Page: A3


Legal pot sales could lead to $95M annual profits for province

Legal pot sales in Manitoba could raise as much as $95 million a year
for government after five years if the province could take over 80% of
the black market, according to recent figures released by the
Pallister government.

The sales projections, which contemplate various levels of black
market penetration, are based on selling marijuana products through
stand-alone government stores. However, since the Pallister government
has opted for private retail stores instead, updated projections could
be higher or lower.

Nevertheless, according to the figures released Thursday, the
government could stand to earn annual profits of between $12.8 million
to $26.7 million in the first three years of operation, based on
taking more than 20%-40% of the black market.

After three years, with a projected 60% market penetration, government
could reap profits of $62.3 million and $94.8 million after five years.

All estimates are net revenues after costs such as salaries and
benefits, costs of goods sold and other operational expenditures.
Caution should also be used with the figures since they include up to
$38.4 million in sales of edible marijuana products in the later
years. Under proposed federal law, which will see the legalization of
marijuana on July 1, 2018, edible products will not be among the
products that can be legally sold.

The province estimates that the black market for marijuana in Manitoba
is currently worth between $217 million and $250 million a year, or 25
million grams of cannabis sold.

It remains unclear how much governments will tax marijuana when it's
sold through private retailers, expected to begin in Manitoba on July
2, 2018, or how close that taxation revenue will be to the net revenue
projections originally contemplated for stand-alone government stores.
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