B.C. pot revenues not so high 6 months after legalization
A slower than anticipated move to a legal retail marijuana industry, a later-than-expected date for legalization and municipal elections this fall mean the province will take in much less pot revenue than initially expected.
Months into legalization and it appears the province isn’t making as much from taxes as it had forecast.
Finance Minister Carole James said an initial estimate of $200 million dollars over three years has been revised to $68 million dollars over three year. The 2019 budget reflects the lower forecast.
Still, the lower numbers show legal sales of recreational marijuana aren’t as high as expected.
That’s not a shock when you consider there’s still only one legal government brick-and-mortar shop open, along with the online shop. Another 14 licenses have been approved, with just three of them in Vancouver.
“I think everyone expected it would happen quicker than it has,” said James in Victoria.
A press release from the Liquor Distribution Branch from February shows interest from several cities and towns in terms of government-operated stores, yet there was no expected date of opening.
While the federal government set the legalization date, the province is in charge of the retail rollout. Alex Robb, General Manager of Trees Island Grown applauds the move to let local governments have significant say in terms of what happens in their communities.
But five months after applying for retail licenses, the dispensaries are still waiting for the green light. Robb says he expects that to happen any day now.
“I think people going to local suppliers,” he told CTV News. Whether that will change when there is widespread legal regime in place, remains questionable.
“The grey market is more affordable, but it’s also of a higher quality than the legal cannabis that's currently available," he said, adding that online reviews of the legal product have resulted in some complaints about dryness, odour and taste.
Part of the delay may also come from the process itself. While local governments have their say, the province also has a number of checks and balances in place to make sure criminals don’t get into the legal market.
“We have had quite a number of applications that at first glance look fine but you dig a little deeper all of a sudden red flags start to be raised,” said Public Safety Minister Mike Farnworth.
He says the goal is to “weed out” those who don’t line up with expectations. Still, any delay in moving to a full retail industry for recreational marijuana gives those in the black or grey market room to breathe.
The federal government is expected to legalize edibles next, and that could boost the province’s expectations around tax revenue.