Province announces multiple taxes on legal pot

Come October, Manitoba Liquor and Lotteries will apply markups of $0.75 per gram on recreational cannabis, plus an additional nine per cent.

Markups of 9% and 75 cents; plus retailers will have to pay 6% of revenues

The Manitoba government will levy a "social responsibility" tax on recreational marijuana sold in the province that it says will pay for the cost of public education, safety, health and addictions associated with the legalization of cannabis. (CBC)

The province has announced its markups on legal pot. 

Come October, Manitoba Liquor and Lotteries will apply markups of $0.75 per gram on recreational cannabis, plus an additional nine per cent. 

Retailers will have to pay, too, contributing six per cent of their revenues to a "social responsibility fee."

The province says the tax will help pay for the cost of public education, safety, health and addictions associated with the legalization of cannabis. 

They also say the move will keep prices low and help eliminate the black market.

"The various health, safety, education and enforcement implications of legalized cannabis fall almost entirely to the provincial level of government," said Growth, Enterprise and Trade Minister Blaine Pedersen in a news release Wednesday. 

"Our plan will help cover these provincial costs and also ensure fairness, recognizing the social responsibility retailers must share."

Former cop disputes plan

Not everyone agrees the taxes and markups will accomplish the province's goals.

Retired Winnipeg police officer turned pot advocate Bill Van der Graaf says adding to the price of legal pot is more likely to encourage users to find cheaper product on the black market.

"Over the internet -- particularly if you're a medical user and you're low-income -- you can get it for five or six dollars a gram," he said. 

"They may think they can control what's going on on the streets of our city, but we have a whole new street system and it's called the internet, and don't they get it?   

"I don't know how they think they're cutting out organized crime."

Van der Graaf says adding tax to alcohol would be a better method of reducing crime.

"Because that's where your problems come from everyday," he said.

'A shameful approach'

Opaskwayak Cree Nation Onekanew (Chief) Christian Sinclair also expressed concern over the province's plan.

The First Nation is partnering with National Access Cannabis to provide retail pot to Manitobans and Sinclair is not happy that so far, First Nations won't be exempt from provincial pot taxes.

"This is a shameful approach to how this is being brought forward to First Nations as it relates to this industry," he said at a news conference held shortly after the province announced its plans.

"It disrespects our nation-to-nation dialogue and our ability to use our governance models to maximize revenues."

Sinclair says their goal was to use the pot levies in First Nations communities and now worries the revenue won't make it back to their communities.

"How we approached this with other First Nations and National Access Cannabis was to structure our business model recognizing under section 87 of the Indian Act that we'd be able to maximize our ability maximize revenues by being able to remove the tax," he explained.

"So by the fact that the government changed it from a levy to a fee sets a dangerous precedent because that opens the door to looking at imposing fees in other areas of our governance going forward."

Sinclair says he and his colleagues will be taking their concerns to government.

Once recreational marijuana is legal this fall, Manitoba Liquor & Lotteries will secure the supply of marijuana and track it, but private retail stores will be in charge of selling it.

In February, the province announced four private companies or consortiums that will retail cannabis in Manitoba.