Users of cannabis are generally looking forward to legalization, but the Liberal government that has promised legalization will also stand to benefit monetarily as a result. CIBC World Markets has a new report out that says the federal and provincial governments could gain an additional $5 billion in annual tax revenues from selling legal cannabis.
Justin Trudeau has already said that legalized cannabis won’t be a “cash cow”, and these tax revenues will be spent on addiction and public health issues.
Avery Shenfeld, CIBC economist, put this report together using such factors as the tax experience in legal American states, estimates of Canadian cannabis consumption, and current “six tax” rates on alcohol and tobacco.
The CIBC report suggests that even though a considerable increase in revenue will happen, it still is not nearly enough to get rid of the government deficits. This tax revenue could provide an incentive for the federal government to drastically speed up the legalization process, but for now the it remains slow and complicated.