Canada Could See $5 Billion Marijuana Jackpot
January 29, 2016 Taxation in Canada
OTTAWA – Tax revenues in Canada could jump by billions in the foreseeable future, if legalized marijuana becomes as popular in Canada as in the USA.
Earlier this week CIBC World Markets released the results of new research indicating that Canada could see tax revenues rise by as much as CAD 5 billion per year by legalizing and taxing the recreational use of marijuana.
The current Liberal government of Canada has already vowed to legalize the use of marijuana in the country, although the exact legislative changes needed to make the promise a reality have nether been finalized nor scheduled.
The research conducted by the CIBC was based on models of current marijuana usage in Canada, combined with models of the rise in tax revenues seen in the USA following the legalization of marijuana in different states across the country.
The research also takes into account the various excise duties and “sin taxes” which may be levied on the sale of recreational marijuana by state and federal authorities.
It is also expected that the if the marijuana industry expands with the same growth as it has in the USA, then it could grow to become a CAD 10 billion industry within the foreseeable future.
The Prime Minister of Canada Justin Trudeau has previously said that the marijuana industry would not become “a cash cow” for Canada, but at that time the government estimated that the legalization would lead to rises in tax revenue of only CAD 3 billion.
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