Ontario Government Remains Clueless About Cannabis

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Can it get any worse?

It would not be an exaggeration to say that Ontario’s provincial government has completed almost everything incorrect in its half-hearted work to roll out cannabis legalization.

It took the province almost six months to open its initial cannabis shop. Ontario only has 22 licensed shops in the province these days. This compares with more than 280 retail places in the province of Alberta. Alberta has significantly less than 1/3rd the population of Ontario.

Then there is the terrible job the province has completed with on the web cannabis retailing. When only “a handful” of cannabis shops have been opened in April 2019, Ontario’s cannabis revenues extra-than-doubled in the initial month.

That is a reflection of how anemic have been on the web sales. Now we have a further indication of how terribly the Doug Ford government has completed with its cannabis retailing. The provincial government managed to drop CAD$42 million promoting cannabis in the initial six months of legalization.

Jay Rosenthal, the president of Enterprise of Cannabis was an apologist for Ontario’s government in a current interview with the CBC.

Rosenthal’s excuse for the provincial government with respect to this big loss was that it reflected all of the “start-up costs” of legalization. Fair sufficient.

Nonetheless, Rosenthal right away goes way out on a limb when asked to examine Ontario’s cannabis business with Colorado’s legal cannabis business. Most cannabis investors know that Colorado has been the most effective jurisdiction in generating the transition to legalized cannabis.

Other state and provincial government can find out from Colorado’s practical experience, each its (initial) failure and its subsequent good results. Nonetheless, these other governments — such as Ontario — seem determined not to do so.

This becomes apparent later in the interview.
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[Question] We’ve observed in Colorado, exactly where this has been going on for 5 years, they ultimately attain the $1 billion dollar mark in tax income. Are we on the path to getting as effective as the Colorado Model.

[Answer] I feel we are, for a couple of factors, a single — we have a larger population. Two — we have a greater tax burden of on cannabis and on lots of other factors. And three — we really have the province involved in the distribution and sale of the solution so we’ll get there almost certainly faster than Colorado did but we are finding there a lot slower, undoubtedly, in the initial phase with retail.

So I feel we’ll get there I feel we’ll almost certainly be celebrating that no earlier than Colorado did. [emphasis mine]

The initial point that Colorado discovered about legalizing cannabis is that higher cannabis taxes do not perform. The trouble is apparent for any individual capable of uncomplicated arithmetic (apparently this excludes most politicians).

Higher taxes on cannabis imply that legal cannabis items cannot come close to competing with black market place costs. This guarantees that the black market place will continue to dominate cannabis commerce.

That was the practical experience in Colorado. It is what has been observed in practically each jurisdiction that has legalized cannabis. It was only when Colorado substantially reduce cannabis taxes subsdtantially that legal cannabis sales – and cannabis taxes – went up.

Low cannabis taxes translate into powerful revenues for the legal cannabis business and extra tax dollars for the state government. Higher government taxes not only strangle the legal business, they outcome in significantly less tax revenues for government.

Ontario’s clueless policy on cannabis taxation basically spells extra failure for the legal cannabis business in that province.

We find out from our errors.

Not Doug Ford’s provincial government in Ontario. The extra errors it tends to make in legalizing cannabis, the significantly less it learns.

Rosenthal (and the Ontario government) say that there will be “another 50” cannabis shops opening “sometime this year”. But Ontario has so badly bungled its lottery method for picking these licensing candidates that the whole procedure is now bogged down in court challenges.

Ontario’s provincial government has earned an “F” for its work(?) at legalizing cannabis in this province to date. Going forward, there is no cause to think it will do any far better.

It is nonetheless entirely inept in basically attempting to open up extra cannabis storefronts. It is pursuing the worst probable policy with respect to its taxation/regulation of the legal cannabis business.

But (as observed in the CBC interview) government officials and their apologists continue to dwell in their personal tiny fantasy globe when it comes to cannabis legalization. In that globe, Ontario’s cannabis policies are functioning and the province is on the road to good results.

Incompetent and delusional.
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