Canada: Alberta raises $30 million from cannabis taxes

Barely 8 months after the legalizing cannabis in Canada, The first tax reports are starting to come in. The province of Alberta has announced the 30 million Canadian dollars raised in the first 6 months thanks to taxes imposed on recreational cannabis products. According to the provincial government's own figures, tax revenues exceeded their estimates by $4 million. So it looks like a promising start for Canada, whose cannabis-related taxes have brought in 186 million Canadian dollars across the country.

However, other provinces had to revise their estimates downwards, such as the British Columbia, which had hoped to earn $200 million in taxes in the three years following legalization, recently announced that it had revised its forecasts, which now stand at $68 million. The situation is similar in Ontario, In Quebec City, where the federal government had forecast a profit of $115 million in 2019-2020, the final figure is closer to C$80 million. The same is true for Quebec City, where forecasts drop from $50 million to $20 million for 2019-2020, with a loss-making public sector - the last straw for cannabis sales that successfully feed the black market.

Estimates of tax revenues have probably been distorted by underestimating the appeal of the black market. Legalization has thus increase prices A gram of legal cannabis now costs $10, compared with $6.37 on the black market.

«It's a trade-off: the more you raise taxes, the more revenue you earn, but that raises prices and makes you less competitive with the black market,» says Brock University professor Michael Armstrong.

A study conducted by Statistics Canada has revealed that the majority of cannabis consumers (+60%) continue to buy on the black market, due to the price of legal cannabis, which is considered uncompetitive, and the difficulty of accessing legal cannabis due to the low number of licenses granted by the Canadian government. On the other hand, the legal market attracted more than 30% of consumers in 6 months.