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Canadian Prime Minister Proposes C$1 Per Gram Tax on Recreational Marijuana

The tax money should be split between the federal and provincial governments, Prime Minister Justin Trudeau said.

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Canadian Prime Minister Justin Trudeau proposed a tax of one dollar a gram on sales of marijuana when it’s legalized next year, his most detailed proposal yet on how he would raise revenue to pay for extra government costs while discouraging illegal sales.

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The C$1 (80 U.S. cents) tax could apply to recreational marijuana sold for up to C$10 a gram, Trudeau said after meeting the leaders of Canada’s 10 provinces in Ottawa on Tuesday. For marijuana sold for more than C$10 a gram the tax could be 10 percent, he said. The tax money should be split between the federal and provincial governments, Trudeau said.

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Canada is still grappling with how to tax legal marijuana at a price low enough to squash the black market. The nascent industry has ballooned in value amid optimism over Trudeau’s plans for recreational sales, which Canaccord Genuity Group Inc. said could reach C$6 billion by 2021.

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