Taxes, Regulations And Competing With The Black Market

Research would appear to indicate that cannabis users aren’t all that sensitive to price. With a few exceptions of free market economics where customers can just buy from a cheaper source, such as walking in to a different dispensary in Vancouver and/or reverting to the black market, data suggests that cannabis users are willing to pay higher prices for the same product. This is particularly impactful when we consider under Health Canada’s MMPR program medicalusers are somewhat locked into a specific Licensed Producer.

Canadian economists and politicians are very interested in the thought of a cannabis tax. After all, consider the additional tax revenue for public services like schools and healthcare. Understanding that cannabis users are less sensitive to price, it is very much likely that politicians will try to push for a cannabis specific tax. Medical users, on the other hand, will argue that taxation behind prescription drugs should equally reflect the cannabis market and not show favouritism. The question lies herein, will taxation be more beneficial to...

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