The United States is leading the North American Marijuana race by a long shot. While marijuana is illegal at the federal level in the U.S., states like California and Colorado are raking in hundreds millions of dollars every year from marijuana revenue.
Canada and Jamaica are trying to play catch up to the United States and investors are playing close attention to see which of the two countries will emerge to be second to the United States.
If it was up to reputation, Jamaica would have been the clear winner considering that the island is well known for marijuana. However, the land of the Rasta Movement that sees marijuana as a holy sacrament is also the land of some of the most incompetent leaders in North America.
The fact that Jamaican leadership continues to be incompetent means they will continue to pussyfoot around complete legalization of cannabis. All while the Canadian Government is moving full speed ahead on legalization.
Below we list 5 reasons why it is Canada and not Jamaica that will catch or even surpass the United States in the North American Marijuana race.
1. Even though not everyone supports the Cannabis Act, conservatives in Canada’s parliament make up too small a group to stop it from passing. Plus, it’s worth pointing out that a number of the concerns conservative lawmakers have had are being addressed. Just as in the U.S., conservative lawmakers in Canada worry about adolescents gaining easier access to pot if C-45 becomes law, as well as how legalizing adult-use cannabis could impact driver safety. These worries are being addressed at the provincial and local level, with local police in charge of enforcement, if approved.
2. The proposed excise tax rate on legal cannabis should make it very price-competitive with the black market. Prime Minister Justin Trudeau, who’s been campaigning for legal adult-use pot for years, has sought a way to cut the black market out of the equation. A devised tax rate of roughly $0.77 per gram (CA$1) on cannabis costing up to $7.70 per gram (CA$10), or a flat 10% on cannabis above that price per gram, should do the trick. This excise tax rate is significantly lower than what Canadians currently pay for alcohol and should compel consumers to make their cannabis purchases in legal channels. What’s more, it’s worth recognizing that unlike the U.S., Canada’s goal of legalization isn’t to generate tax revenue. Though this tax revenue will cover some aspects of local regulatory costs, as described in more detail in the next point, it’s really about creating a price-competitive product to drive the black market out of Canada.
3. The Canadian federal government worked out a two-year tax-sharing agreement with all provinces, save for Manitoba. Under the terms of the agreement, each of the provinces will receive 75% of excise tax revenue collected, with the remaining 25% going to the federal government. Why more for the provinces, you ask? Since they’re on the front-line of regulating the Cannabis Act, they’ll need the money for enforcement purposes.
4. Canada has a proven track record given that it legalized medicinal marijuana back in 2001. Since this legalization, Health Canada, the Canadian equivalent of the U.S. Department of Health and Human Services, has overseen aspects concerns licensing, patient enrollment, production, and even product quality. The fact that this has been ongoing for years shows that Canada has laid the infrastructure needed to be successful.
5. While nothing is a given when it comes to politics, we’ve witnessed hundreds of millions of dollars being invested in capacity expansion in Canada over the past two years. There’s absolutely no reason these growers would have undertaken such projects had recreational marijuana not been a near-certainty in the future.
While we see all of the above happening in Canada, all we see in Jamaica is a hefty fee to attain a grower’s license, which means, even if marijuana is fully legalized in Jamaica, it will still be illegal for poor planters who can’t afford to pay for the license, as they will have to hide and plant.