A new study pegs B.C. users' marijuana consumption at a value of $500 million per year.

Marijuana tax estimates based on doubling price of pot

Chasing too much of a government weed windfall may keep black market alive, observers say

Taxing B.C. bud could generate hundreds of millions of dollars in provincial government revenue each year, but likely not billions, a new study suggests.

The study, prepared by UBC and SFU researchers and published in the International Journal of Drug Policy, estimates B.C. marijuana users spend roughly $500 million a year on pot.

The Stop The Violence BC campaign to legalize marijuana has used that figure to infer B.C. could reap $2.5 billion in revenue over five years by heavily taxing the drug.

That would mean at least doubling the current price of weed to generate the same amount in tax if it were sold legally in the province – a scenario some observers have warned could keep the gang-controlled black market alive and well.

Washington State, with a similar sized pot-smoking population, has come up with its own estimate of nearly $2 billion in government revenue over five years from taxing marijuana. Voters there approved legalization in a referendum earlier this month.

Its planned 25-per-cent tax would be levied not just once but on each wholesale and retail sale, and other state and local taxes and licensing fees would also apply.

Kevin Hollett, a spokesman for Stop The Violence, defended the idea of tax levels that sharply drive up the price, noting taxes make up 81 per cent of the retail price of tobacco.

But SFU criminology professor Neil Boyd said governments hungry to plunder the pot market should be careful how much money they try to extract.

“The current price on the black market of marijuana is $200 to 300 an ounce,” he said. “If people who are going to tax and regulate it were going to sell it for $600, you’re still going to have a black market.”

Another criminologist, Daryl Plecas, has argued high taxes just keep the door open for organized crime.

He said the main market for gangs would go up in smoke if pot was made legal for anyone to grow and possess and government made no attempt to tax or regulate it, but added that only works if consistent laws are applied across North America.

Boyd said he believes governments could tap a major flow of revenue under legalization without driving too much trade underground.

Alcohol is heavily taxed, he noted, but there’s no significant black market.

He agreed illegal trade will remain a factor as long as there’s a big export market.

A North America-wide scheme would be best, he said, but predicts there’d be “a really significant change” if even half the U.S. states taxed and regulated pot.

The new study’s estimates were based on an average price paid in B.C. of $7.50 per gram, although it cautioned most pot smokers may pay more than that.

Washington’s estimates assumed a $12-per-gram retail price, four times the estimated $3-per-gram cost of licensed marijuana producers.

Past studies suggest B.C. grown marijuana is worth $7 billion a year, with at least 85 per cent going to export.

The number of pot grow-ops in B.C. is thought to have nearly doubled between 2003 and 2010.

Just Posted

After 30 years, Agassiz’s Miss Marge set to retire from Variety Play

From 1989 to today, Miss Marge has taken generations of kids through the district play program

RCMP believe Missing Hope teenager was headed to Chilliwack

Keely Reeze Loewen, 18, last in contact with a family member on June 13

Summer service by bus from Chilliwack to Cultus Lake starting soon

Seasonal change will see bus service from Vedder Road to Cultus elementary until Labour Day

Chilliwack trustees divided on Trans Mountain pipeline route near two schools

School district will pen letter to NEB to ask for re-routing away from schools to be considered

Agassiz RCMP finally able to get outdoor picnic table

Funds from Harrison and Kent will allow the detachment to purchase the outdoor seating area

VIDEO: Reading splashes into Agassiz’s Ferny Coombe Pool

The Agassiz Library held its annual Reading in the Pool event Friday, June 14

Victoria double murder trial: Blood splatter analyst found no shoe prints on scene

RCMP analyst testifies to smears, fingermarks, ‘swipe and wipe’ patterns around apartment

B.C. teen killed by falling tree near Victoria

Second youth also injured in freak incident during field trip at Camp Barnard near Sooke

Elias Pettersson wins Calder Trophy as NHL’s top rookie

Vancouver forward first Canuck to win award since Pavel Bure in 1992

FVRD chair calls B.C. incineration plan for Philippines waste ‘disturbing’

Metro Vancouver ‘uniquely capable’ of safely disposing of waste coming back to Canada, say officials

VIDEO: Acknowledging skeptics, finance minister vows to build Trans Mountain project

Bill Morneau said he recognizes ‘huge amount of anxiety’ in Calgary over future of oil and gas sector

Channel your inner pirate in epic Canada-wide treasure hunt

200 treasure chests hidden among trails and waterways, lots of prizes to be claimed

Shovels could be in the ground on Trans Mountain by September, CEO says

Ian Anderson points to weeks likely required for NEB to reinstate 2016 regulatory record

Scorpion gives birth after hitching ride in B.C. woman’s luggage

A Vancouver woman inadvertently brought the animal home from a trip to Cuba

Most Read