In the fiscal year April 2024 to March 2025, the provincial government of Ontario anticipates a record windfall of more than CA$379 million from its portion of the federal cannabis duty. This revenue represents a 22.2% increase from the previous year’s budget. The expectation comes after a federal report revealed that “after five years of legalization, there are no licensed producers of legal cannabis products.”
The Coordinated Cannabis Taxation Agreement between Ontario and the federal government determines the province’s share of the excise duty. Compared to other alcohol-based taxes, Ontario’s expected cannabis revenue for this period exceeds what the province is expecting to collect from taxes applied to beer, wine, and spirits combined.
Fighting illegal cannabis operations with additional funding
Ontario’s budget has also committed a separate sum of CA$ 31 million over the next three years, which will be used to crack down on illegal cannabis businesses, particularly those operating online. According to the provincial budget: “The government is committed to combatting the illegal cannabis market to ensure the integrity of the regulated private retail model and address the significant health risks associated with illegal cannabis products that do not meet government safety standards.”
The funds will be allocated to Ontario’s Provincial Joint Forces Cannabis Enforcement Team. This initiative, led by the Ontario Provincial Police, aims to target illegal marijuana storefronts and to protect public interests.
Benefits to be reaped from the legal cannabis market
The growth of the legal cannabis market in Ontario presents opportunities for increased revenue and improved public safety standards. The anticipated CA$379 million in cannabis duty will contribute significantly to the province’s budget, providing funding for various initiatives and projects across Ontario.
Additionally, the ongoing crackdown on illegal businesses operating within the sector will help protect consumers and maintain the integrity of the regulated private retail model. This collaborative effort between law enforcement, industry, and policymakers has the potential to attract more investment and foster long-term stability in this burgeoning market.
A shift in consumer demand towards legal channels
With additional funds being directed to enforce stricter regulations and policing of the illicit cannabis market, it is expected that consumer preferences will gradually shift towards legal channels. The transparent nature of the regulated private retail model ensures that customers have access to safe cannabis products backed by government safety standards.
This expected transformation will protect consumers and contribute to the success of legitimate businesses in the sector. As evidenced by the projected sizeable windfall in revenue, Ontario’s burgeoning legal cannabis industry holds promise for continued growth and economic development across the province.
Rita Ferreira
Rita is a seasoned writer with over five years of experience, having worked with globally renowned platforms, including Forbes and Miister CBD. Her deep knowledge of hemp-related businesses and passion for delivering accurate and concise information distinguish her in the industry. Rita's contributions empower individuals and companies to navigate the complexities of the cannabis world, and her work remains a valuable resource for those seeking a deeper understanding of its potential.
