Legal pot would mean $60M tax windfall for province, London economist says
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A London economist says that Colorado has proven what many have been saying all along: Legalize marijuana, regulate it and the tax dollars will come flowing in.
It’s been estimated that in the first month of legalized weed sales, the state made a cool $2.1 million in taxes. That’s outside of the $1.4 million it made taxing medicinal marijuana.
Ivey School associate professor Mike Moffatt said the tax works out to about 40 cents for each of Colorado’s 5.2 million people.
“Assuming the usage would be similar among Ontario’s almost 13 million people, the tax the government would earn would be around (a) lofty $5 million,” he said.
That’s for a single month, equating to $60 million a year.
“A lot of this tax money is money that would otherwise be going to drug dealers and organized crime,” Moffatt said. “Instead of financing that, why not finance schools and hospital and all the things our society needs?”
He cited a Fraser Institute report that stated the federal government could realize over a billion dollars a year if pot was legalized.
But London West Conservative MP Ed Holder said he couldn’t disagree more with the figures. Price, he said, will still create competition between the legal outlets and drug dealers.
“That does not go away because it’s been legalized,” he said. “The underground economy does not go away.”
Plus, Holder said, he’s never known of a situation in which a person using hard drugs didn’t start off with marijuana.
“If you ask our local (police) chief if he thinks marijuana should be legalized, it would be interesting to get his reaction to that. I imagine he’d say no. The previous chief said no … because it leads to other things,” Holder said. “At what point do you put money ahead of principle?”
Hi-Times manager Mike Gin, who’s been in the London head shop business for 25 years, argued it only makes sense for the government to cash in.
“It’s a revenue generator, so why lose the money if they can tax it?” he asked. “They could regulate it like cigarettes so that people under a certain age couldn’t buy it.”