Only two countries on Earth have legalized marijuana or cannabis completely. Two of these countries are Uruguay and Canada. This makes Canada the only developed country to have legalized recreational marijuana use and sale. Recently passed legislation by the Canadian government has spurred a strong debate on both sides. However, many observers believe that the true motivation behind Canada’s marijuana legalization is economic. This article will look at the economic impact of legalizing cannabis in Canada.
The Economic Benefits of Cannabis
Several economic benefits typically stated by pro-cannabis activists can be found on this page:
Taxes
Annual cannabis sales in Canada are expected to reach between $5 billion and $8 billion. According to critics of this scheme, it generates no new economic activity. This annual sum of $5 billion to $8 billion was already a significant component of the Canadian economy. It was not accounted for due to its illegal nature. Nonetheless, now that it is legal, it will be accounted for.
This divergence, however, is not meaningless. The Canadian government will tax cannabis because it is now legal to sell. The Canadian government has decided to tax marijuana at the rate of $1 per gram or 10% of the retail price, whichever is greater. This means that the Canadian government will earn an additional $500 to $800 million in taxes each year! Each state will retain around 75% of the additional funds raised through the sale. As a result, legalizing cannabis will result in a significant increase in revenue for the Canadian government.
Additionally, employment taxes are expected to generate significant additional revenue. Until recently, the earnings of drug dealers were illegal. As a result, they have been exempt from taxation. Shops like Select Cannabis in Edmonton can now operate legally. As a result, they will face taxation. Additionally, thousands of employees’ salaries will be subject to taxation. As a result, Canada’s government will benefit significantly.
Lesser Government Expenses
Cannabis legalization benefits the government enormously. This is because revenue increases greatly, while expenses reduce significantly as well. Decriminalization of marijuana possession and selling will result in a significant decrease in the number of violations in Canada. No drug gangs will perpetrate drug-related violence on the streets of Canada. Eliminating these gangs will result in huge law enforcement cost reductions for the Canadian government. Additionally, as the jail population decreases, the cost of operating prisons and, eventually, the cost of rehabilitating criminals will fall.
Tourism Impact
In some northern states, the US government has relaunched its war on narcotics. Additionally, several other countries restrict the use of cannabis. Canada will undoubtedly appeal to these individuals as a holiday destination. The Canadian government is ecstatic at the prospect of visitors worldwide visiting Canada and that cannabis tourism at this location will result in a huge increase in private and public revenue.
Real Estate Impact
Finally, the Canadian real estate industry predicts a positive impact from the legalization of marijuana. Increased demand for warehouse and retail space benefits the real estate industry by boosting the quantity of commercial and industrial units sold or leased. Rental housing demand is likely to grow as well. This is because states and countries that have legalized marijuana attract more visitors.
Conclusion
To recap, the Canadian government’s plans to legalize cannabis are expected to result in huge economic gains. Other repercussions must be considered as well, but if Uruguay and the Netherlands are any indications, legalizing cannabis appears to have no adverse effect.
