Retailers are doing booming business, but, with few of them, understand how the first tax take could be so low.
Legal pot is a booming business for Evergreen Cannabis on West 4th Avenue in Kitsilano, but co-owner Mike Babins also understands how tax revenues to the province are falling short of expectations.
“There’s only three stores open in the city and none in Victoria,” Babins said.
“I see (tax revenue) coming in very fast as stores open, as (retail sales) spread across the province,” Babins added, but in the meantime there are “not enough shops and too many alternatives that are too tempting.”
This week The Ministry of Finance revealed that it received its first instalment of B.C.’s share from the federal excise tax on legal marijuana sales, a $1.3-million payment for October, covering the days after official legalization Oct. 17.
And ministry staff said the province now expects its excise-tax take will add up to $68 million over the first three years of legalized recreational cannabis sales, which is considerably less than B.C.’s pre-legalization estimate that its share of excise-tax revenue could total $200 million over that period.
The federal government set a special excise-tax rate of $1 per gram for legal cannabis priced at $10 or less and 10 per cent on sales over $10 a gram, with revenue to be split 75 per cent to the provinces and 25 per cent to stay with the feds.
That first look at excise-tax revenue, however, appears “pathetic,” said cannabis executive Dan Sutton, “because we aren’t selling as much cannabis as we could be.”
Derrick Penner – The Growth Op – March 6, 2019.