Manitoba's cannabis retailers hit with 6% tax to cover 'social costs' of legalization

Cannabis retailers in Manitobawill be slapped with a six per cent levy to cover the province's "social costs" of legalizing the drug.

The Manitoba government plans to begin collecting the markup, which it defines as a "social responsibility fee," this January, the province announced on Thursday.

The new revenue stream would ensure retailers share in the social costs of public education, safety, health and addictions, the provincial news release said.

"Obviously we're going to have costs,"said justice minister Cliff Cullen, after the legislation was introduced in the Manitoba Legislature."There's going to be social costs to cannabis.

"We really don't knowwhat those costs will amount to on an annual basis. We've asked each department to keep track of their costs, whether it be health, whether it be justice, or on the education side of things," he said.

For now, the government pegged the taxat six per centof aretailer's gross revenue from selling recreational cannabis.

That percentage can change if social costs are higher or lower than expected, Cullen said.

"It can go as high as the government wants it to go," he said.

Provincial costs unknown

"We'retrying to [find]balance here," Cullen added. "Wedon't know what the costs will be. That's why we're trying to monitor the costs."

He said the expected legalization of cannabis edibles from the federal governmentmay add to the province's expenses next year.

The Progressive Conservative government revealedits intention to collect the tax this summer. It'snecessary, the governmentsaid at the time, because the varioushealth, safety, education and enforcement implications of legalized cannabis fall squarely at itsfeet.

He told reporters he couldn't estimatehow much revenue the province expects to take infrom the fee.

'Sky isn't going to fall'

After all the public hand-wringing over the legalization of recreational cannabis, Cullen said the province has had little to worry about.

Manitoba has not experienced the same product shortages as other jurisdictionsand policing agencies have not noticed a massive spike in work, he said.

"We had this discussion before, especially with the police authorities. They're saying, 'Listen, people are already using cannabis. The sky isn't going to fall on Oct. 17,' and Ithink that's the reality," he said. "Manitobansare just dealing with it."