High taxes on pot will help criminals

Postmedia Network

If the Liberals insist on legalizing marijuana before July 1, 2018, then they need to get it right. Canadians are learning that’s easier said than done.

There are many hurdles – from health to enforcement to taxation – that the feds, provinces and families need to grapple with before then.

As Conservative leadership candidate and doctor Kellie Leitch wrote in a recent Sun guest column, medical research shows “young people who use marijuana have lower high school graduation rates, which puts their future in jeopardy. Worse, the science shows that marijuana use in 18- to 25-year-olds can result in brain deformities.”

It’s information like this that’s left many observers, including Sun columnist Jim Warren, calling for the minimum age to be raised higher than 18, which is what's currently in Prime Minister Justin Trudeau’s proposed Cannabis Act.

Interestingly, keeping pot out of the hands of youth was one of Trudeau’s stated reasons behind legalization in the first place. He says he wants to get it out of the black market and into the realm of regulation.

One related question the feds face is what level of taxation they should stick on wacky tobacky.

As the Canadian Press reports it, federal finance minister Bill Morneau “is adamant that maximizing federal revenues is not, and will not be, the priority on pot, suggesting Ottawa favours keeping prices competitive against the street value in order to push the local pusher out of business.”

If taxes are too high, it will result in a number of consequences. There won’t be incentive for current recreational marijuana users to shift from illegal dealers to legal sales outlets. High taxes may even push people towards criminal networks, as they have with cigarettes.

We are creatures of habit. Major incentives are needed to change behaviour and that will include changing where recreational users purchase drugs. High taxes won't help.

Cannabis shouldn’t be treated as a cash cow either. If the government rakes in significant revenues, they’ll get addicted to the new buzz. They won’t want to stop.

While “sin taxes” are in theory a good idea to manage behaviour, the black market around contraband tobacco provides proof they work poorly and carry harmful unintended consequences.