Manitoba's cannabis retailers hit with 6% tax to cover 'social costs' of legalization

Cannabis retailers in Manitoba will be slapped with a six per cent levy to cover the province's "social costs" in legalizing the drug.

New fee imposed so retailers can bear costs of education, safety, health and addiction as well

Manitoba's legal cannabis retailers will share in the social costs of public education, safety, health and addictions, the government said. (Noah Berger/Associated Press)

Cannabis retailers in Manitoba will be slapped with a six per cent levy to cover the province's "social costs" of legalizing the drug.

The Manitoba government plans to begin collecting the markup, which it defines as a "social responsibility fee," this January, the province announced on Thursday.

The new revenue stream would ensure retailers share in the social costs of public education, safety, health and addictions, the provincial news release said.

"Obviously we're going to have costs," said justice minister Cliff Cullen, after the legislation was introduced in the Manitoba Legislature. "There's going to be social costs to cannabis.

"We really don't know what those costs will amount to on an annual basis. We've asked each department to keep track of their costs, whether it be health, whether it be justice, or on the education side of things," he said.

In the weeks after recreational cannabis has been legalized, justice minister Cliff Cullen said there hasn't been much in the way of surprises. "Manitobans are just dealing with it," he said. (Jeff Stapleton/CBC)

For now, the government pegged the tax at six per cent of a retailer's gross revenue from selling recreational cannabis.

That percentage can change if social costs are higher or lower than expected, Cullen said.

"It can go as high as the government wants it to go," he said.

Provincial costs unknown

"We're trying to [find] balance here," Cullen added. "We don't know what the costs will be. That's why we're trying to monitor the costs."

He said the expected legalization of cannabis edibles from the federal government may add to the province's expenses next year.

The Progressive Conservative government revealed its intention to collect the tax this summer. It's necessary, the government said at the time, because the various health, safety, education and enforcement implications of legalized cannabis fall squarely at its feet. 

He told reporters he couldn't estimate how much revenue the province expects to take in from the fee.

'Sky isn't going to fall'

After all the public hand-wringing over the legalization of recreational cannabis, Cullen said the province has had little to worry about.

Manitoba has not experienced the same product shortages as other jurisdictions and policing agencies have not noticed a massive spike in work, he said. 

"We had this discussion before, especially with the police authorities. They're saying, 'Listen, people are already using cannabis. The sky isn't going to fall on Oct. 17,' and I think that's the reality," he said. "Manitobans are just dealing with it."

About the Author

Ian Froese

Reporter

Ian Froese is a reporter at CBC Manitoba. He previously wrote about rural Manitoba for the Brandon Sun and the Carillon in Steinbach. Story idea? Email ian.froese@cbc.ca.