This year London, The Forest City established itself as the fourth-biggest legal weed market in Ontario. According to a report released by the Ontario Cannabis Store,Londoners bought almost $9 million worth of cannabis which totals to more than a million gram in the first quarter of the year. Sale of weed includes a 13% HST, which equates to a good amount of revenue for the province as well as the city.
London Deputy Mayor, Josh Morgan explained the tax revenue generated by London through the sale of weed, since legalization in 2018, “So what the province did was they established a $40 million fund from the taxation revenues related to cannabis for municipalities across Ontario. What they did with that fund was they provided an initial allocation back in 2018 that was done on a per household basis. And so the city of London share of that initial allocation in 2018 was about $450,000. Any communities that allowed for retail store fronts, which the city of London did were able to access another portion of that funding, and that second allocation for London totalled about $550,000.So we got close to a million out of that fund. That remaining amount was distributed in 2019. So since then, though, the province said that communities that have retail store fronts, which we do, we’ll get a share of and of the revenue collected in Ontario that are over $100 million in the first two years following legalization. So they did have over $100 million of revenue. And the London share of that amount was $112,000. So we have received in total about 1.3 or 1.4 million since 2018 related to cannabis taxation revenues.”
This is a relatively new stream of revenue for London. The municipalities get a guideline from the province to invest the tax revenue generated from the sale of marijuana. Deputy Morgan said there was a range of things like additional costs related to the retail store fronts, increased enforcement related to police, public health file enforcement, court administration, any litigation for illegal activity and increased activity related to paramedic or fire services related to new cannabis operations they city could have spend the tax revenue from and it did.
The city’s cannabis sector is also facing a problem of too many stores opening up. Tokyo Smoke’s assistant manager, Jonathan Lima says, “The number of stores we are getting is shocking, we were the first store in London two years ago, now you can easily find more than 35 stores around the city. So in a city like London which is not as big, it’s a problem, especially when you are buying consistently from the same buyer, which is the government.”
However, Morgan says that the number of stores popping up is not in the total control of the city and that we are seeing a relatively competitive market being established.
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