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OTTAWA — Federal and provincial governments should have the power to levy taxes on marijuana, with Ottawa responsible for taxing manufacturers and imports, and provinces levying taxes at the retail level, says a prominent think tank.

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Right now, the marijuana sector is messy, shadowy and highly fragmented, but as legalization takes hold in more jurisdictions, that will change.





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In a newly released policy paper, the C.D. Howe Institute also recommends the government focus on achieving public-health goals and avoiding a black market in marijuana.

The Liberals have promised to legalize, regulate and restrict access to marijuana to keep it out of the hands of children while denying criminals the financial profits.

The current system of prohibition does not stop young people from using marijuana and too many Canadians end up with criminal records for possessing small amounts of pot, the Liberals say.