The office of the Parliamentary Budget Officer (PBO) has weighed in on the potential legalization of marijuana and what it might do for Canada’s economy.
According to a study considering the fiscal impact of legalizing marijuana in Canada, initial revenues would likely be in the hundreds of millions rather than the billions forecast by some analysts and government officials.
Budget Officer Jean-Denis Frechette says projected numbers from the report estimate revenues more in the neighbourhood of $600 million split between Ottawa and about 60% going to the 13 provinces and territories. This is based on the assumption that legalized retail cannabis will cost about nine dollars per gram.
Price, quantity consumed, and competition from legal and Illegal markets will most certainly have an effect on dollars collected. Mostafa Askari, the assistant parliamentary budget officer, says a study comparing pot prices shows very little tax room to make legalized cannabis a cash cow for government.
Legal sales of recreational cannabis may begin as early as January 2018, and the report suggests that in 2018 an estimated 4.6 million individuals aged 15 and over will use cannabis at least once, consuming an estimated 655 metric tons of cannabis. That number would rise to 734 metric tonnes by 2021 and 5.2 million.
— PBO-DPB (@PBO_DPB) November 1, 2016