Yukon begins private online cannabis sales

In another victory for cannabis freedom, Canada’s Yukon Territory will begin private online cannabis sales. For four years, Yukon Liquor Corporation monopolized online cannabis sales. The Yukon government is also legalizing private sector delivery.

As of this announcement, the Yukon government will completely withdraw from the cannabis business.

The area currently has six retailers, four in the capital city of Whitehorse, one in Dawson City and the other in Watson Lake.

Yukon has only one state-licensed producer.

Yukon begins private online cannabis sales

It is rare for state monopolies to give up such revenue. Yukon’s annual cannabis earnings last year were $1.4 million, up 2.2 percent from a year earlier.

However, the Yukon government has always said it plans to “support the Yukon’s private cannabis industry.”

“I am pleased to honor our commitment to transfer all retail cannabis operations, including online sales, to the Yukon’s private, licensed retailers,” said Ranj Pillai, Minister for Spirits and Cannabis. “The cannabis industry in the Yukon continues to grow year after year, and I look forward to seeing the industry continue to thrive, responsibly serving Yukoners and contributing to the economy of our territory.”

It seems as if, for once, a government actually kept its word. They started government online and retail in 2018 for “public health” reasons. Four years later, they feel confident enough to switch everything to a private model.

The territory’s first state-run brick-and-mortar retailer closed after a year.

However, despite this positive step in the right direction, private retailers still have to work with the territorial distribution monopoly.

To date, Saskatchewan is the only region in Canada where licensed growers can sell directly to retailers.

Government renounces sources of income

Freedom advocates understand why this is good news. But a large segment of the population thinks “we” are the government, and by forgoing online sales as a steady source of income, “we” are depriving ourselves.

The argument is elementary: the government gets money from online cannabis sales that goes towards healthcare costs or education.

In reality, the government borrows money for social services. Taxes (or fees charged by monopolized industries) pay for the interest on the debt.

Also, it’s not good government to throw money into inefficient healthcare systems. Also, governments are likely to collect more taxes with less.

This means that when people pay less tax and aren’t constrained by excessive regulations, they are more productive, which results in more funds going to government.

Contrasted with the alternative model, where governments take half your income for “social services” and then wonder why the population isn’t as productive as it could be.

So in the long run, it’s better to follow the Yukon example and legalize cannabis in the private sector across the board.

Government vs. Private Sector

Ludwig von Mises was a 20th-century economist whose work is more relevant than ever. Although he has written many books, one of his smallest and most accessible is his 1944 work, Bureaucracy.

He explains how we either organize around the profit motive or follow a hierarchy of rules and regulations.

Profit is a decentralized motivation. CEOs don’t need to keep tabs on every single employee everywhere. Profit takes the guesswork out of resource allocation.

If you lose money, you lose customers. As an entrepreneur, you have to find out what people want. Not making money means your resource allocation is wasteful in the eyes of consumers.

Contrast this with bureaucracy, which is the “administration of matters which cannot be verified by economic calculations”.

Nobody can be a bureaucrat and an innovator.

Or, to quote Mises: “The sophisticated methods of modern bookkeeping, accounting and business statistics provide the entrepreneur with a true picture of all his operations. He is able to know how successful or unsuccessful each transaction was.”

“A bureaucrat differs from a non-bureaucrat precisely in that he works in a field where it is impossible to measure the result of a person’s efforts in money.”

The cannabis industry in the Yukon can be monetized from seed to sail.

Once upon a time there was a government bureaucracy that performed tasks that could not express profit and loss.

Services such as police, fire, courts and (in Canada) healthcare.

But online cannabis sales? The Yukon government has come to their senses. When will Canada’s provinces follow suit?

footnote(s)

https://yukon.ca/en/news/government-yukon-completes-handover-cannabis-retail-sales-private-sector

https://yukon.ca/en/learn-about-cannabis

https://mises.org/library/bureaucracy