Now that we’re into 2018, municipalities are facing up to the reality that barring some unforeseen development, marijuana legalization will be a reality less than six months from now.
While some of the dire warnings are probably overblown, it is nonetheless true that towns and cities will face many of the responsibilities for policing and social impacts.
With that in mind, the City of West Kelowna has spearheaded a letter-writing campaign to the province calling for municipalities to receive 50 per cent of the tax revenue that’s earmarked for the province.
Town of Osoyoos Council agreed at Monday’s meeting to send a letter supporting this initiative.
This is a very reasonable request, given that Osoyoos is now responsible for 70 per cent of its policing costs, even before we consider changes to bylaws, zoning and other impacts.
Oliver town council is asking for even more – 75 per cent.
Mayor Ron Hovanes was only joking when he remarked, “We’re gonna be rich!”
Nonetheless, 75-per-cent of the province’s revenue is excessively greedy, considering that the province will face numerous costs of its own.
It’s missed on some people that the goal of legalization is not to encourage marijuana use.
Rather, it’s to provide a legally regulated system that will largely replace the thriving black market.
Right now, it is far easier for children to obtain marijuana in the unregulated illegal market than it is for them to obtain alcohol or tobacco from markets that are regulated.
For this strategy to work, legal marijuana must be priced high enough that it doesn’t encourage use, but low enough that it can compete against the black market.
And this means taxes can’t be excessive.
Some of the debate on social media – where strong opinions matter more than facts – suggests that by asking for a share, municipalities will raise the retail price of legal pot to the point that it won’t compete with the black market. This isn’t correct.
The proposed excise tax is $1 per gram and all that’s being discussed is how that tax will be divided between different levels of government.
Initially, the federal government called for a 50-50 split of the tax between the federal and provincial governments.
In December, however, they bowed to provincial pressure and accepted that the provinces and territories will receive 75 cents of the $1 per gram excise tax and the federal government would receive 25 cents.
If the province agrees to split its share with municipalities on a 50-50 basis, each would receive half of the provincial share of 75 cents, which works out to 37.5 cents a gram.
There still are unknowns and it’s quite possible the system will need to be tweaked in the future, but this is a reasonable starting point.
It must also be recognized that the current system of prohibition also imposes many costs on society.
To some extent we can learn from the U.S. experience where recreational marijuana is already legal in eight states, including Washington, just across the border.
But the situations aren’t really analogous because marijuana in the U.S. remains illegal at the federal level. States and municipalities have reached agreements, but the federal U.S. government isn’t part of it.
In the U.S., the responsibilities of federal, state and local governments are also different from Canada and the healthcare system is very different.
There are still many unknowns, but it makes sense to provide municipalities with sufficient funding to handle their new frontline responsibilities.
