Government revenues from legal pot could reach $5B a year: bank economist

This file photo shows marijuana in Markham, Ont., on Thursday, January 7, 2016. (Nathan Denette/THE CANADIAN PRESS)


The Canadian Press
Published Thursday, January 28, 2016 11:14AM EST
Last Updated Thursday, January 28, 2016 12:08PM EST
OTTAWA - 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 revenues 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, and other factors -- such as prevailing "sin tax" rates on alcohol and tobacco.

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.
Trudeau maintains that legalized pot will not be a cash cow, and that all revenues will be used to address public health and addictions issues.
The bank report suggests there will be a sizeable bump in government revenues from the eventual legal sales, but says the cash will not be enough to make government deficits simply go up in smoke.

Where do these people get these numbers?

if i stopped eating, i could save thousands year over year.....
they can crunch whatever numbers. they are all hypothetical. until it happens, no one will know...and as for Governments being right with their predictions I say HAHAHAAA. they are almost never right.
i still think that when you get appointed or voted in, you have to spend at least 6 months to be dehumanized...how else can these MP's come up with the crap they do. we as regular folks can see right through their smoke and mirrors. when we tell them that they're not fooling us, they go onto to another script like we didn't say anything...then when their plans go wrong, they can't figure it out...then someone from the real world gets through and they are "why didn't we think of that"....so backwards

I love how they pull these figures out of their asses. Based on what $/g? What quantity? And most importantly, WHERE WILL IT COME FROM?

Shit, using their logic its hard to be wrong when everything is guess work. Im calling it now guys, the rec industry could be worth between one dollar and one hundred billion a year.......

Nailed it

CalyxCrusher said:

I love how they pull these figures out of their asses. Based on what $/g? What quantity? And most importantly, WHERE WILL IT COME FROM?

Shit, using their logic its hard to be wrong when everything is guess work. Im calling it now guys, the rec industry could be worth between one dollar and one hundred billion a year.......

Nailed it

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is that an average? haha

"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, and other factors — such as prevailing "sin tax" rates on alcohol and tobacco."

this is bad math

1) current estimates of canadian recreational pot consumption: people are not going to buy expensive, poor quality weed during the 8hrs they are open when most will be at work, when they can call their current bm dealer for better/cheaper/anytime. rec smokers are going to want variety and quality that may not be available, as we have seen with the hiccups of the mmpr.

2)the revenue experience in the u.s. states that have legalized: they are getting bled dry down there even harder then the gov is trying to do to us here. this is not a realistic comparison as it will not work in practically work here in Canada, there is a loss of understanding between theory and practice in regards to their position here.

3) sin tax: bm has price breaks as you go up the ladder with quantity. i don't think the gov't will be in the mood for that either. the sin tax in bm is due to the legal status of the flower, the sin tax at the lcbo is to help with healthcare, debt ect... and this is a simple gouging. they need to pay some tax but not above and beyond like they plan. its just going to push people back to old habits and the bm.

if they are worried about deficits, they really should get on with this...let us have out medicine. they just said GST can be collected from the sick.
if they get on with legalization, they would run smaller deficits with the "green rush"
this whole scene is disgusting. the majority want it, the Government said it's OK and they'll legalize it but then are stepping away now saying it's a HUGE job to do this. it'll take longer than 4 years at this rate

doingdishes said:

if they are worried about deficits, they really should get on with this...let us have out medicine. they just said GST can be collected from the sick.
if they get on with legalization, they would run smaller deficits with the "green rush"
this whole scene is disgusting. the majority want it, the Government said it's OK and they'll legalize it but then are stepping away now saying it's a HUGE job to do this. it'll take longer than 4 years at this rate

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were closing in on 3 years soon just for a half assed medical program.

Economist like Rick doing the math

CannaReview said:

Where do these people get these numbers?

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I'll never pay tax on MJ or MMJ. They missed that shot back in the seventies when they decided that jail was better than taxes. I bet a whole lot of folks feel the same way.

The Hippy said:

I'll never pay tax on MJ or MMJ. They missed that shot back in the seventies when they decided that jail was better than taxes. I bet a whole lot of folks feel the same way.

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I wish.

If the CIBC economist is out to lunch, which he very well could be, what do those who think he's wrong think is a reasonable outlook?

ricky1lung said:

If the CIBC economist is out to lunch, which he very well could be, what do those who think he's wrong think is a reasonable outlook?

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$2.50 is my guess...haha

It looks like they expect it to be heavily taxed, which would be a mistake.

JT said one of the hurdles would be how to tax it...why not apply the same logic as booze. there's already a system in place for that.

Trudeau maintains that legalized pot will not be a cash cow, and that all revenues will be used to address public health and addictions issues.

now that is some funny shit.....hahahahahaha

WHATFG said:

Trudeau maintains that legalized pot will not be a cash cow, and that all revenues will be used to address public health and addictions issues.

now that is some funny shit.....hahahahahaha

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yeah...what was he smoking...haha

this industry will make oil and gas look like water once it gets its feet on the ground!!

who is anyone tryin to fool...

WHATFG said:

Trudeau maintains that legalized pot will not be a cash cow, and that all revenues will be used to address public health and addictions issues.

now that is some funny shit.....hahahahahaha

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He only speaks for federal taxes...the provinces will be the ones that will get the bulk of taxes they'll piss it away the same as they do with tax revenue from booze and smokes. When are they going to put all that revenue into public health and addictions? Everybody's looking to get a piece of the pie, but until it happens, no one knows how big that pie will be. $5 Billion is a pipe-dream...Medical needs to be tax-free for those that need to use dispensaries or LP's.