Ontario eyes $10 price per gram for legal pot

Finance minister to work with Ottawa, other provinces for uniformity across Canada

Ontario’s biggest weed dealer is considering a retail price of about $10 a gram in a system that could bring a tax windfall of more than $100 million a year.

That $10 fee — estimated after New Brunswick signed deals with two suppliers last week — is on the radar as officials here determine a price for recreational marijuana when it becomes legal next July1, Finance Minister Charles Sousa says.

“It’s certainly something we’re giving consideration to,” Sousa told reporters.

“We’re trying to work with all of our colleagues across Canada,” Sousa added, noting federal and provincial finance ministers will meet later this year on pricing and taxation levels.

“The intent is to have some uniformity with these prices across Canada.”

It’s crucial to have prices in line with neighbouring jurisdictions and to “ensure it’s not overly expensive” to avoid fuelling illegal sales in the underground economy, Sousa added. Critics have warned the government monopoly on pot sales will not kill the black market, with some observers saying street prices are below $10.

NDP Leader Andrea Horwath said plans for 40 government-run cannabis stores province-wide in 2018 will not put much of a dent in the black market right away.

“It’s pretty naive,” she told reporters Wednesday.

Sousa would not speculate on how much the sale of recreational cannabis could bring to provincial coffers.

That’s because the cost of a new LCBO-run system of stand-alone pot stores, public education about the impacts of marijuana, and the costs of enforcement and policing will have to be factored in.

But Sousa conceded gross revenues of more than $100 million annually are possible given that Ontario will have a larger customer base than many U.S. states with legalized marijuana.

“It’s not a ridiculous number to consider because, as you’ve seen in other parts of North America, the numbers have actually been even higher.”

Eight U.S. states, including California, Colorado and Washington, have legalized marijuana.

CNN has reported that Colorado, for example, has brought in $506 million in taxes and fees since retail sales began in 2014, with $200 million last year alone.

“Demand across Canada is actually pretty high. . . . You can see it by the number of shops that already are there illegally.” CHARLES SOUSA ONTARIO FINANCE MINISTER

The finance minister suggested sales will be brisk when the government’s shops and website begin filling orders for cannabis next summer.

“Demand across Canada is actually pretty high. . . . You can see it by the number of shops that already are there illegally.”

The government has signalled those illegal shops will be shut down as the government opens 40 of its stores next July, rising to 150 within two years. The LCBO will get its cannabis products from medical marijuana producers licenced by Health Canada.

Ontarians will have to be 19 to purchase cannabis — the same age of majority as with alcohol — and can only consume it legally at home.

The government says it chose the LCBO to run the pot distribution system because it already has staff trained to refuse underage drinkers and has a tightly controlled distribution channel.