Ontario to be 'under water' on pot revenue for spring budget: finance minister

Recreational marijuana isn't expected to turn a profit for the Ontario government this year, the province's finance minister said Wednesday, noting that there would be no projections for pot revenues or profits in the upcoming spring budget.

Ontario is working on opening standalone stores to sellrecreational marijuana once the drug is legalized this summer.

"I don't foresee having a net revenue from this," he said. "I have not put forward any projections in terms of what the revenueswill be or the dividends will be from cannabis retailing in the coming years. I want to first see how it evolves and be more determined in terms of what that revenue will look like."

In December, the federal government agreed to give the provincesand territories a 75 per cent share of tax revenues from the sale of legalized marijuana. Sousa said the excise tax will be used to offset the start-up costs for the province's retail stores and otheractivities around legalization.

"That won't be enough to cover out outlays and our expenses,"he said of the tax revenue. "We're still going to be under water."

The government will know better two years after legalization if recreational cannabis sales can be a money maker for the province,Sousa said.

Sousa acknowledged there is a range of opinion on the prospects of profits from recreational marijuana sales, including some critics of the government's approach who suggest pot sales will be lucrative. Until the government knows what the market is like in Ontario the province must take a wait-and-see approach, he said.

"We know that LCBO and our gaming and some other agencies thatwe have are huge contributors to our dividends," he said. "We'llsee if cannabis retail will be the same way. We're playing itsafe."

Under rules outlined in the fall, the province intends to sell marijuana in up to 150 stores run by the Liquor Control Board of Ontario to people 19 and older, with a ban on pot's consumption in public spaces or workplaces.