Municipal Marijuana — The Canadian Weed Town and Legalization

So far, the Puff Puff Post legalization tour has taken you to four different provinces to explore what cannabis will look like across Canada. Ontario, Quebec, Alberta, and Manitoba have all been put under the magnifying glass. But what about municipal marijuana? Where does the so-called weed town fit in the post-legalization landscape?

Today we will be exploring what you need to know about towns and cannabis in Canada. From the revenue debate to municipal prohibition, we will dissect everything you need to know about before October.

British Columbia Sets a Precedent for the Weed Town

The fair distribution of tax revenue is a hotly contested issue that raises some interesting questions. The province of British Columbia might very well be setting a national precedent for how provinces deal with municipal marijuana.

Earlier this month, the Union of B.C. Municipalities proposed an audacious tax plan to John Horgan’s provincial government. The union, which represents British Columbia’s municipalities, suggested that it receive as much as 40 percent of the tax revenue derived from cannabis sales. The proposed agreement would span 2 years, after which, the provincial government and the UBCM would be allowed to reassess based upon the status quo.

Much to the surprise of the Canadian public, the provincial NDP government stated that they were amenable to the idea.

Finance Minister Carole James had this to say regarding the proposed division of revenue.

“I’d say we’re open to having that discussion. I think that’s important and I’m glad for the work that they’ve done because it will help us in our conversations,”

After the end of prohibition, British Columbia is set to reap the benefits of legalization. Their current plan involves charging an excise tax of roughly ten percent of the final retail price of the cannabis. On top of this, a provincial sales tax will be added.

Municipal Marijuana and Tax Revenue — How Much is Too Much?

The UBCM’s proposal was a bold one. The state of affairs dictated by the Trudeau administration made no provisions for how much of the pie municipalities were entitled to.

The prime minister proposed that the federal government would be entitled to 25% of the tax revenue associated with cannabis sales. The provinces would receive the remaining 75%. So where does municipal marijuana fit in?

The federal government has allotted a great deal of freedom to provinces and territories in setting up their cannabis economies. The fate of the weed town is no different. Provinces are at liberty to establish ad hoc arrangements with their municipalities as they see fit.

While allotting 40 percent of the revenue to towns and cities might seem excessive, running municipal cannabis can be expensive. Among the numerous costs absorbed by municipalities are bylaws that need to be drafted, zoning issues requiring resolution, the training, and education of law enforcement as well as many others.

While these might seem minor, the Ontario government has already promised $40 million to police departments alone, to offset the enforcement and training costs associated with legalization.

With this in mind, are there towns that would rather do away with municipal marijuana altogether? And if so, are they even allowed to?

Municipal Prohibition — The Towns that Rejected Marijuana Legalization

Richmond Hill was among the first Ontario towns to reject the establishment of a cannabis economy within its borders. Mayor David Barrow cited what he perceived as disorganization and a lack of preparedness on behalf of the federal and provincial governments.

“we would not like to have a recreational marijuana store in our town… When you’ve got your act together, we’ll be happy to talk to you.”

The town of Markham would follow and ban municipal marijuana as well. These two Ontario towns have made bold statements in defiance of the federal government. Is this even permitted?

According to Doug Ford’s plan for legalization, towns are free to opt out of playing host to cannabis stores. However, these municipalities must do so by a set date or forever hold their peace.

While theoretically possible, banning cannabis from one’s town comes with a host of issues. In his history of municipal prohibition in Ontario, Dan Malleck, Associate Professor of medical history at Brock University, discussed the practical realities of this predicament. Municipal prohibition was tried once before with alcohol during the temperance movement and the results were not pretty.

A black market was created within the dry towns, meaning residents were still getting drunk. However, the alcohol they were consuming was harsher and subject to less regulation. Drunkenness also increased, and patrons who were not comfortable with purchasing from the black market simply visited other towns. As a result, municipalities adjacent to dry towns became inundated with alcoholism.

Municipal marijuana prohibition will no doubt follow similar lines. Organized crime will thrive, and the black market will persist. Prohibition was an utter failure at a nationwide level. Implementing it at a municipal level could be even more disastrous.

Additionally, prohibiting cannabis stores might not even be effective. Municipalities can opt out of brick and mortar stores, but online sales are a different matter. Each province has created provisions for how it plans to deal with e-cannabis. Ontario and Alberta have chosen to take charge of online sales through various government bodies. Manitoba, on the other hand, will permit private companies to sell their product online. Therefore, a ban on cannabis deliveries will be impossible to enforce.

Conclusions

The future looks bright for the Canadian weed town. With BC setting a president for tax revenue distribution, it appears the costs of having cannabis in any particular town will be greatly outweighed by the lucrative benefits. Those who opt out now are missing out on a vital opportunity.

By: Stefan Hosko