Ontario Considers Dropping Weed Prices to Government Standard

In an attempt to avoid fueling black market pot sales, the Ontario government wants to keep prices as low as possible across the board. The province’s biggest weed supplier now wants to set retail prices at $10 a gram, which could generate a tax windfall of well over $100 million annually. That $10 price is up for consideration as officials haggle prices for recreational pot when it becomes legal on July 1, 2018.

That fee, estimated after New Brunswick signed deals last week with two suppliers, is likely to get approval. Finance Minister Charles Sousa told reporters on Wednesday, “It is certainly something we are giving consideration to. We are trying to work with all of our colleagues across Canada,” noting that provincial and federal finance ministers will determine pricing and tax rates in meetings later this year.

“The intent is to have some uniformity with these prices across Canada,” Sousa added. “It is crucial to have prices in line with neighboring jurisdictions, and to ensure it is not overly expensive, to avoid fueling illegal sales in the underground economy.” Many critics have cautioned the government that creating a monopoly on weed sales will not deter the illegal market.

Sousa declined to speculate on how much provincial coffers would receive from recreational marijuana sales. That is because other factors also require consideration, such as educating the public about the effects of marijuana, costs of a new LCBO-run system of standalone pot stores, and the expenses involved in policing and enforcement.

However, Sousa did concede that annual gross revenues could exceed more than $100 million a year given that Ontario has a larger consumer base than most states with legal weed laws in the United States. He said, “It is not a ridiculous number to consider because as you have seen in other parts of North America, the numbers have actually been even higher.”

Currently, eight U.S. states have liberalized the sales of recreational marijuana, including Washington State, Colorado, and California. Since retail sales started back in 2014, Colorado has raked in $506 million just in fees and taxes alone, with $200 million of that generated in just the last year. The finance minister indicated very brisk sales when government stores and websites start filling pot orders next summer.

Sousa explained, “Demand across Canada is actually pretty high. You can see it by the number of shops that already are there illegally.” The government plans to shut down those illegal shops and open 40 of its own stores by next July, which will grow to 150 stores owned and run by the government over the next two years. Health Canada will license medical cannabis producers, who will supply the LCBO exclusively.

If you live in Ontario, you will need to be 19-years of age or older to buy weed, the same age to buy alcohol legally. It will be illegal to consume your purchases anywhere but at home. The LCBO won the bid to govern Ontario’s weed distribution system because, according to government sources, it already has a tightly controlled channel for distribution and trained staff to deal with underage consumers.

Transportation Minister Steven Del Duca and Premier Kathleen Wynne announced earlier this week of plans to introduce harsher penalties for those caught driving under the influence of marijuana. Drivers 21-years old or younger will have to endure a “zero tolerance” policy toward stoned driving. The same policy will apply to truckers and novice drivers, as well.

Young drivers convicted of a first offense, along with all G1, G2, M1, and M2 license holders, will face $250 fines and three-day suspensions. If convicted of a second offense, suspensions become weeklong and fines grow to $350. Subsequent convictions incur $450 fines and month-long suspensions. Commercial drivers will pay $450 and endure three-day suspensions any time police catch them high.

In addition to normal Criminal Code charges for driving impaired, other penalties for stoned driving may include harsher fines, prison sentences, and even loss of driving licenses. Tests to detect marijuana impairment are currently underway, and the federal government is set to approve one that measures THC levels in saliva soon, despite reservations about their effectiveness in colder weather.