In another victory for cannabis liberty, the Canadian territory of the Yukon will begin private cannabis sales. For four years, the Yukon Liquor Corporation has monopolized online cannabis sales. The Yukon government is also legalizing private-sector delivery.
As of this announcement, the Yukon government will be entirely out of the cannabis business.
The territory currently has six retailers, four in the capital of Whitehorse, one in Dawson City, and the other in Watson lake.
Yukon has only one federally licensed producer.
Yukon to Begin Private Online Cannabis Sales
It’s rare for government monopolies to give up revenue like this. Yukon’s annual cannabis profit last year was $1.4 million, an increase of 2.2 percent from the year before.
However, the Yukon government has always said they plan to “support the Yukon’s private cannabis industry.”
“I am pleased to fulfill our commitment to transfer all cannabis retail, including online sales, to the Yukon’s private, licensed retailers,” said Ranj Pillai, the Minister responsible for liquor and cannabis. “The Yukon’s cannabis industry continues to see year-over-year growth and I look forward to seeing the industry continue to thrive, responsibly serve Yukoners and contribute to our territory’s economy.”
It seems that if, for once, a government actually stuck to its word. They began with government online and retail in 2018 for “public health” reasons. Four years later, they feel confident enough to move everything to a private model.
The territory’s first brick-and-mortar government-run retailer closed shop only after a year.
However, despite this positive step in the right direction, private retailers still have to work with the territorial distribution monopoly.
So far, Saskatchewan is the only region in Canada where licensed growers can sell directly to retailers.
Government Forgoing Revenue Stream
Champions of liberty understand why this is good news. But a large segment of the population thinks “we” are the government, so by forgoing online sales as a steady revenue stream, “we” are depriving ourselves.
The argument is elementary: the government gets money from online cannabis sales, which goes toward health-care costs or education.
In reality, the government borrows funds for social services. Taxes (or fees collected from monopolized industries) pay for the interest on the debt.
Furthermore, throwing money at inefficient health-care systems doesn’t constitute good government. As well, governments are likely to raise more taxes with less.
That is, when people are paying fewer taxes and are unrestricted by overbearing regulations, they are more productive, which results in more funds going to the government.
As opposed to the alternative model, where governments take half your income for “social services” and then wonder why the populace isn’t as productive as they could be.
So, in the long run, it’s better to follow Yukon’s example and legalize private-sector cannabis across the board.
Government vs Private Sector
Ludwig von Mises was a 20th-century economist whose work is more relevant than ever. Although he wrote many books, one of his smallest and most accessible is his 1944 work, Bureaucracy.
He explains how we organize either around the profit motive or following a hierarchy of rules and regulations.
Profit is a decentralized motivation. It doesn’t require CEOs everywhere to keep tabs on every single employee. Profit takes the guesswork out of allocating resources.
When you’re losing money, you’re losing customers. As an entrepreneur, you have to figure out what people want. Not making money indicates that your allocation of resources is wasteful in the eyes of the consumers.
Contrast this with bureaucracy, which is the “management of affairs which cannot be checked by economic calculation.”
Nobody can be a bureaucrat and an innovator.
Or, to quote Mises, “The elaborate methods of modern bookkeeping, accountancy, and business statistics provide the enterpriser with a faithful image of all his operations. He is in a position to learn how successful or unsuccessful every one of his transactions was.”
“A bureaucrat differs from a nonbureaucrat precisely because he is working in a field in which it is impossible to appraise the result of a man’s effort in terms of money.”
The Yukon cannabis industry, from seed to sail, can be appraised in terms of money.
Once upon a time, we had government bureaucracies perform tasks that profit and loss couldn’t express.
Services like police, firefighters, the courts, and (in Canada) health-care.
But online cannabis sales? The Yukon government has come to their senses. When will Canada’s provinces follow suit?