Enforcing legal pot may cause tax windfall to go up in smoke
It’s been long said that the best way to control illegal drugs is to legalize them.
But that doesn’t mean legalizing cannabis will be cheap or easy.
Legal enforcement of cannabis outlined by the Saskatchewan Party government last week will be tough and costly to enforce.
It’s also been long said, if anybody can lose money selling drugs, it’s the government. That’s a bit too flippant, but pot won’t be the windfall some think it will be.
Come April 10 when Finance Minister Donna Harpauer unveils the 2018-19 Saskatchewan budget, we may see a new and potentially impressive budget line item on revenue from marijuana sales as a result of a specific tax, like we see on booze.
There again, the Sask. Party may instead choose to be cautious about its revenue predictions, given the possibility its Conservative brethren in the Senate will hold up Prime Minister Justin Trudeau’s July 1 implementation date. No matter. One suspects a cash-strapped provincial government would be happy to remain vague on its potential pot revenue — at least until the budget’s mid-year update in November.
Justice Minister Don Morgan and Saskatchewan Liquor and Gaming Minister Gene Makowsky announced last week that even with the additional sin tax, retailers would have to maintain a reasonable retail price — about $10 a gram, taxes included — to keep legal marijuana competitive with blackmarket, illegal products.
This will immediately cut into whatever government pot tax grab there may be.
Morgan noted the recent fentanyl scare — cocaine laced with the legal drug that’s caused deaths — may be one reason why many will flock to governmentregulated cannabis. This may not be the case.
With pot users already accustomed to illegal purchasing, we may face a similar scenario to the alcohol bootlegging in the 1920s (and still going on today) cutting into government revenue.
Certainly, it will require substantially more dollars dedicated to policing and the rather messy matter of who exactly pays for these yet-to-be determined additional policing costs. (The province has committed to more training, but not hiring more officers.)
Ultimately, it will be you paying for it — either through your provincial taxes or municipal property tax. But given the stringent restrictions outlined by the province, it would be ridiculous for them not to set aside some of this new pot revenue to help with municipal policing costs.
The tough new law states: “A person may not consume cannabis in any public place, or place that is not private.” A “public place” is then defined as: “a place or building to which the public has or is permitted to have access; a park, playground, cinema, outdoor theatre or other place of public resort or amusement; a highway, road, street, lane or thoroughfare; any unoccupied land or building, and; any other prescribed place.”
Also, the new law equally applies to vaping cannabis in public. The ability of cannabis users to mask or disguise pot use while vaping will be a further policing headache.
Were all this not problematic enough, the province’s new cannabis law includes zero tolerance for pot smoking and driving — stricter than our current federal .08 blood alcohol content or even the .04 BAC vehicle-seizure law in Saskatchewan.
And it deems legal cannabis must be transported straight home from the retailer — far more restrictive (virtually unenforceable, some argue) than the enforcement provisions for transporting alcohol.
Subsection 109(1) of the Alcohol and Gaming Regulation Act, 1997 states “no one shall have or keep or consume alcohol in a vehicle.” But Subsection (2) provides the exception “it is not unlawful to have alcohol in a vehicle for the purpose of transporting it from a place at which it was lawfully obtained to a place where it can be lawfully kept or consumed.”
Usually, that’s generously interpreted to mean no “open liquor” in the vehicle.
It all means fewer tax dollars with big enforcement costs that the province can’t simply dump on municipalities. A windfall? Not yet.