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Originally Posted by Fuzz
The reason most people were wrong, and the lesson from that, is that the government chose to tax the ever-loving crap out of the industry before it could get established. Of course people will stick with the cheap option, when taxes are close to 30%. Taxes for vape products are 50%. The government was warned not to do this so they could stamp out the black market, but they ignored that advice, and, well, here we are. The lesson is, our government is run by morons.
https://www.cannabisbusinesstimes.co...vape-products/ |
But taxing pot to generate government revenue was one of the justifications - probably the biggest - for legalization in the first place. If the plan at the outset was to tax it at only 5 per cent, legalization wouldn’t have had anywhere near the public and institutional support.
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The most appealing argument in favor of legalization of marijuana is the increased tax revenue that it would bring to the Canadian economy. Legalizing marijuana provides an important advantage over prohibition because it allows for the Government to collect taxes from the legalized drug. Specifically, high demand for recreational marijuana in Canada indicates that legalization of the drug would yield significant tax revenue. The free market price of marijuana is estimated to be particularly low without taxation. This allows for the Government to impose higher taxes on marijuana while keeping the price at a competitive level with other intoxicants (eg, alcohol and tobacco).
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4968247/
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And taxes are only one of the expenses commercial growers and retailers have above those of the black market. Infrastructure, regulation, licensing, employee benefits, marketing - all the costs legitimate businesses have that Terry doesn’t. Legal commercial pot just can’t compete with the black market when it comes to heavy and price-sensitive users.