Canadian Think Tank Touts Tax Benefits of Marijuana Legalization

The Fraser Institute, an economic think tank in Vancouver, British Columbia, said that legalizing marijuana and taxing it would generate more than C$2 billion (US$1.467 billion) a year in additional tax revenues for the province, the Windsor Star reported June 9.

The estimate is based on a study involving British Columbia alone, where there are an estimated 17,500 marijuana grow operations. The researchers said that the annual marijuana crop, if valued at retail street prices and sold by the cigarette, is worth over $7 billion.

“Using conservative assumptions about Canadian consumption, this could translate into potential revenues for the government of over $2 billion,” the study said. “In British Columbia, as in other provinces, notably Quebec and Ontario, it is a significant crop that fuels organized crime.”

The think tank also said that the extent of police resources needed to destroy marijuana grow operations a year in British Columbia is greater than the low penalties for conviction.

“If we treat marijuana like any other commodity, we can tax it, regulate it, and use the resources the industry generates rather than continue a war against consumption and production that has long since been lost,” said study author Stephen Easton, professor of economics at Simon Fraser University and a senior fellow at the institute. “It is apparent that we are reliving the experience of alcohol prohibition of the early years of the last century.”