First to Announce

The Ontario government became the first provincial government to announce how marijuana will be sold in their jurisdiction when pot becomes legal next Canada Day. As reported by the CBC:

The Ontario government announced Friday that it will create a cannabis control board and open up to 60 storefronts in the first year to manage the sale and distribution of marijuana in the province.

Two of the major selling points to the public in legalizing marijuana was that doing so would provide a new revenue stream for provincial governments and that legalizing sales would reduce the black market.

The approach approved by Ontario Premier Kathleen Wynne has missed the mark on both of those major selling points.

Legalization of alcohol sales in Alberta is the closest historical precedent for the impact of marijuana distribution in Canada. As highlighted by the Fraser Institute:

As for the claim of lost revenue, this is a red herring often advanced by privatization opponents, including for example government employees’ unions in Ontario whose members work in government liquor stores.

The Ontario government should be honest with the citizens it governs. If the Wynne Liberals truly wanted to maximize contributions to general revenue from marijuana sales they would follow a distribution model that minimizes expenses.

The proposed distribution model provides more jobs for members of government employee unions. That is certainly part of the agenda for the Ontario government in its proposal for pot sales. Some of these higher expenses will be passed on to marijuana consumers.

High Cost

The higher the cost of legal marijuana the more likely stoners will be to continue purchasing marijuana on the black market. Price will be the key value proposition for current pot dealers hoping to remain in business. Price is not the only way in which the proposed distribution model will serve to further the black market.

A well-designed marijuana distribution model will ensure that there are enough outlets, in the right locations, to limit the need for black market operators. Chantal Hebert of the Toronto Star pointed out the problem with the 150 stores that Ontario plans to open in the first two years of legalized pot sales in the province:

For the sake of comparison, Colorado, with a population of fewer than six million people, initially opened 136 venues for the purpose of legally selling marijuana. Ontario, with more than double that population and a larger territory, is planning to offer little more than the same number. It is as if a cheese artisan set out to drive Kraft out of business by setting up a stall at the St. Lawrence market in Toronto.

The driving principle behind progressive politics is that bigger government is always better. Liberals cannot be honest with this value proposition because it is not a stable basis for building a governing coalition in any western democracy.

The Ontario government proved their adherence to this principle in the way in which it is proposing to sell marijuana. It is unfortunate for the people of Ontario that marijuana legalization is being used in the never ending quest for the government bureaucracy to grow larger.


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