Cannabis Sales: Keep It Cheap

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The Parliamentary Budget Office has just released a preliminary report on its findings and recommendations to the government in regard to the long sought after legalization of Cannabis. Browsing its pages it looks like Canada is preparing to make its first and biggest mistake when it comes to marijuana legalization, the price.

The Trudeau government needs to take a more business minded approach to the issue. It has some serious competitors to undercut on this market and it’s almost a century behind.

First, let’s take a look back in the not so distant past of 2012. In every election since I became a legal voter, my ballot has always been marked for the NDP or Green Party. However, in that year a wounded Liberal Party, one that had lost even the right to be the nation’s official opposition, voted to support the end of cannabis prohibition.

Liberal Policy officially became to advocate for legalization and I was swayed.

In 2015 an unknown number of Canadians were far more influenced by this policy shift than we should ever admit and voted in favour of the Trudeau Liberals. We voted for convenience and the elimination of the threat of prison or criminal records. We voted for an end to our money funding criminals. We voted, giggled and probably ordered pizza.

It was a bold day for stoners. Trudeau wasn’t exactly one of us but at least he copped to inhaling.

Like most twenty-nine year old single fathers, holding a full time job and perusing a university degree, I don’t have time to wait in my car outside McDonald’s for a dealer who is an hour late.

We want to walk into a store, buy an ounce of pot, pay tax and walk out. We don’t need to worry about the smell from our freezer bags landing us in court for hurting no one except the Snicker Bars display at the gas station. We want customer service, quality control, complaint departments.

However now that the budget committee advising the government and the Special Task Force on Marijuana – a group set up to design the new laws that will “regulate and restrict” how we get legal highs – has announced that there will be almost no difference from the current street price, all those involved need to question if they’re serious about curtailing illegal sales.

For the uninitiated, cannabis prices, like most products, varies depending on quality and quantity of product. Buying small amounts like a single gram will cost the individual a standard $10. I have lived or been stoned in five different provinces and, with the exception of Newfoundland, this price is pretty standard.

By keeping the price the same the government will fail to do the most basic and essential part of legalization, undercutting the illegal underground economy. While there has been a medical system in place there is not a large scale commercial apparatus set up yet. Those who operate the current illegitimate markets to regular users are far more experienced, have more reliable & tested supply lines and are in a better position to maintain their customer base unless the government works to actively pull consumers away from them.

For this to be the real landmark piece of legislation the cloudy-eyed masses need it to be the price needs to be lower.

Think between a $5-$8 gram.

Offer the same product for half the cost. Subsidize the industry’s current producers and future start-ups while slowly increasing the taxes. In 4 years, cap the increases at $10 a gram for the foreseeable future.

Those four years would devastate every illegal dealer along the supply chain, from the trench coat wearing teenager outside a local shopping mall, to the gangs and criminal operations that fund grow houses, hidden among our neighborhoods.

There’s a precedent for this in our legal system as the tax on tobacco, is increased incrementally by two percent every year. By making the increases temporary with relation to cannabis the Liberals could maintain the trust of the public that they weren’t using this issue as a money grab while still making significant gains from the sales and, most importantly, dealing serious blows to criminal organizations’ pocket books right out of the gate.

This position is easy to criticize of course. Comparable prices are still better than a higher ones. The stocks of many Canadian cannabis producers surged upwards after the release of the report as those in the industry announced they could cope with the proposed taxation.

The next big step is to see what recommendations the Special Task Force puts forward at the end of the month. This will be the blueprint for the future legislation promised during the election. Whatever the future shape these new laws take the government need to be ready to truly face its competition.

 

 

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