A combined C$186 million (US$140 million) in federal and provincial tax revenues was generated by the Canadian legal cannabis industry over its first five months of sales.
Statistics Canada has released the latest figures on how much money the cannabis industry in pulling in for Canadian governments. Taxes were generated both from an excise tax on cannabis sales and the country's general goods and services tax (GST) applied to the sale of all products.
In the tax breakdown, the provinces walked away with the majority of the revenues, as tax dollars on cannabis is split 25/75 by the federal and provincial governments. The feds have so far received C$19 million (US$ 14 million) in excise taxes and C$36 million (US$27 million) in GST. The provinces have reaped C$79 million (US$59 million) from the excise tax and $53 million (US$40 million) from GST.
The first quarter of 2019 saw significant increases in cannabis-related tax revenues over the final quarter of 2018, and Statistics Canada predicts that trend will continue through the year.
"Federal and provincial government revenue from general taxes on goods and services as well as excise taxes may rise further in the second half of the year, as additional cannabis retail outlets are scheduled to open," Statistics Canada said in a release.
These numbers are lower than the Canadian government had initially hoped, said the Conference Board of Canada's economist Robyn Gibbard, which she blamed on the "bumpy" start the new legal market has faced.
"However, we think that as the kinks are worked out, governments can expect strong growth in revenues from cannabis sales going forward," Gibbard said in a statement.
The rough start Gibbard referred to is likely the huge supply issues the cannabis market has been facing. While cannabis supplies are beginning to level out now, most licensed dispensaries are still struggling to keep product on the shelves, particularly in the categories consumers are most interested in.
But perhaps the biggest reason why cannabis-related tax revenues have fallen short of projections is because of the black market. Through the first quarter of 2019 a mere C$377 million (US$283 million) worth of cannabis sales was pushed through legal channels. Illicit sales were significantly higher at an estimated C$1.1 billion (US$827 million), showing the legal market still has a lot of ground to cover.
h/t Huffington Post