New numbers from Statistics Canada show the federal and provincial governments made $186-million in revenue from cannabis taxes in just over five months since legalization.
Stats Can says Ottawa earned $19-million in excise taxes, while the provinces got $79-million.
Tom Adams, the managing director and principal analyst with BDS Analytics in California, says there is little doubt that cannabis is a significant revenue generator, but the key is setting the right taxation level.
He says the illicit market in the US is in the $50-billion range while in Canada it’s about $8- to $10-billion.
He says the critical thing is that too high a tax rate, given the robust illicit market, means the tax revenues will disappoint, as they did in California. He calls it a “tricky” thing to get right.