Weedonomics: What Canada Can Teach Us About the Business of Getting High


MedMen, Venice, CA/John Irvine

On October 16, 2018, Canada officially legalized recreational marijuana across the country. From coast-to-coast, friendly Canadians waited in line to become among the first to legally purchase and consume cannabis for entirely recreational purposes.

Months later, with the high of legalization waning, many Canadian consumers are facing up to the harsh realities of government-sanctioned and controlled vices. According to Statistics Canada, prices are now 17.4% higher than prior to legalization, scarce legal supply has driven some Canadians to unlicensed dispensaries and a combination of new taxes and disparate provincial administrative laws are adding a layer of complexity to a previously black market industry.

Despite this, the Democratic governments of New York and New Jersey have recently announced plans to legalize marijuana in a seemingly similar fashion.  For instance, New York governor Andrew Cuomo has announced a plan that appears positively Canuckian in nature with highlights including:

  • Establishing separate licensing programs for marijuana growers, distributors and retailers, with a ban on growers also opening retail shops;
  • Imposing a 20 percent state tax and 2 percent local tax on the sale of the drug from wholesalers to retailers, plus a per-gram tax on growers;
  • Allowing counties and large cities to ban marijuana sales within their boundaries; and
  • Banning marijuana sales to anyone under the age of 21.

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