Isaac Newton said he lost money on the South Sea Bubble financial collapse because, although he could track the movement of stars, he could not calculate the madness of men.
In Canada, the legalization of cannabis in October 2018, unleashed a mania that has seen nearly 1,000 companies receive federal production licences and retailers open nearly 3,500 stores selling cannabis products across the country. It is a short street indeed that doesn’t have a pot shop on it.
The Cannabis Act was a cornerstone piece of legislation for the Trudeau government – a welcome end to 94 years of failed
prohibition and an attempt to make Canada safer by closing down the black market in unregulated pot.
It hasn’t quite worked out that way and now there are dire warning as that the onerous federal regulator and tax regime is in danger of killing the nascent licensed production market.
Bill Blair, then parliamentary secretary to the justice minister with special responsibility to usher in legalization, said the legislation was an effort to outflank organized crime. “We’ve created competition in the marketplace,” he said.
The reality is that the black market is alive and kicking, accounting for around 35 per cent of sales, according to Statistics Canada, and faces virtually no risk from enforcement. A study by Deloitte suggested that the average price in the illicit market remains 20-per-cent lower than in legal retail stores.
In part, this is because of federal excise taxation.
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