Canada’s Buck-A-Gram Tax On Cannabis


Trudeau Proposes A Buck-A-Gram Excise Tax On Legal Cannabis

Last week, Prime Minister Justin Trudeau and the premiers met to discuss small business tax reform and the tight timeline for legalizing cannabis, coming up in July. One of the focal points of the meeting was Justin Trudeau’s suggestion of a federal excise tax on recreational marijuana. From this excise tax—$1 for every $10 gram of pot, and a 10 percent tax on sales of more than $10—the provinces would get half. The premiers bucked, claiming that since the areas will be dealing with a lot more work by regulating and enforcing the new regime while Ottawa remains hands-off, they should get a more significant cut of the tax revenue.




Trudeau responded by reminding them that Ottawa is not legalizing pot for the profits; this should not be the only goal of provinces. Ottawa, from the very beginning, has said that legalization and regulation of marijuana were not to make profits through tax revenue. It was to keep the drug out of the hands of Canada’s youth and to stomp out as much of the black market as possible. Maintaining taxes sufficiently low to keep the price low should help with the latter point. If the federal government fails to get taxation and pot pricing right, cannabis users might feel pushed to turn towards the black market to get lower prices.




Representing Canada’s largest licensed producer, Bruce Linton of Canopy Growth Corp. feels it’s a comfortable number that works. Recreational cannabis that sells at $10 per gram, with the taxes embedded, is not a big stretch for the consumer. Linton says that’s at or below the average black market price. For some context on excise taxes, here’s what’s being charged in legal recreational markets around the world.



  • When Colorado legalized, weed was taxed ~30% (about half of that was a wholesale tax paid by retailers) but as of August 9, 2017, the state changed to a 15% retail marijuana excise tax rate.


  • When the legal recreational market begins, there will be a 15% sales tax


  • unique flat tax of $50 for each ounce of dry cannabis flower


  • opened its recreational market this year with a 15% sales tax


  • 37% tax on marijuana and related products


  • weed sales are taxed at 17%


  • cannabis costs $1.30 per gram (90 cents goes back to the cannabis industry, while the rest is split between pharmacies and the state government)
October 15, 2017

by Alana Armstrong

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Alana seeks to see cannabis from the perspective of politicians, advocates, entrepreneurs, and consumers. She got her start with a byline in the arts and culture section and crossed over into cannabis after using it medicinally. Current projects include investigations into cannabis and wellness; entrepreneurs of the Green Rush; cannabis for athletes; and the evolution of cannabis laws and culture in Canada.


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