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Government slips tax rates based on THC & CBD purity into budget

alexd

Administrator
Staff member
New in the budget: the Canadian government will tax cannabis edibles and extracts based on potency. Higher potency = higher tax rate, lower potency = lower tax rate.

They will probably have to set up an entire government department to measure and check and monitor THC & CBD levels to base those tax rates on. I guess they figured that since extracts and edibles are manufactured, the maker can control the purity exactly so this is what they will tax.

To me, this is like charging a tax rate based on the percentage of alcohol in a liquid - a lower tax rate for beer per ml as opposed to vodka. If this flies as a tax scheme in cannabis, they will probably soon apply the formula to alcohol products.

This would be a first - a government tax rate based on purity . It basically guarantees that government mass produced extracts will trend toward lower quality to minimize the tax impact on the consumer. Ultimately, this budget line is an absolute gift to the black market in the extracts category, because consumers will look to them for a higher quality product that will cost the same or less.
 

praktik

TRIBE Member
It'll be a give and take for some decades. Probably we will be too conservative and have too big a black market due to all the pearl clutchers living around us so worried about the problems gonna happen with legal weed.

One day there will be a report someone can make saying: look how big the black market is still!

And people will ask why and part of the reason will be too high taxes and part of it will be overly restrictive access.

The policies will change to shrink the black market.

We'll be in a better balance by 2040 - just you wait!
 

praktik

TRIBE Member
I think they will probably use the law enforcement club repeatedly to beat down competition before that happens. It ain't gonna be pretty.
It'll be part of the toolkit, enforcement always is

But aggressive enforcement can only do so much when access controls and taxes probably determine more directly the size of the black market.

Watch for, generally speaking, declining taxation levels and easier access across the provinces over the coming decades. Those that lag in these respects will have the biggest black markets.
 

Mondieu

TRIBE Member
They’re worming into a well established industry without the slightest clue what they’re doing. You can’t stop people with years of experience, the finest recipes and ingredients from making soup in their own kitchens. You can’t stop people from buying tasty-ass soup, either.

People who don’t already know someone that makes amazing soup will probably head to the food court to try a reasonable facsimile. Those who’ve already been getting the top-shelf will stay with their present, well-established sources. NOBODY I know personally is buying ANY product from the government. Everything I’ve tried from OCS has been poorly cured, over-dried garbage, compared to what I can get delivered in an hour by making a phone call.

If you want industrially produced soup, you hit your grocery store and buy products that are created with an eye on margins. If you want quality, you go to Grandma’s and eat the REAL thing.

That’s not changing anytime soon.
 
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