Prime Minister Justin Trudeau is proposing to levy a federal excise tax on recreational marijuana once it becomes legal next July, with the provinces and territories receiving half the revenue.
Under the federal proposal put to premiers during a first ministers meeting Tuesday, each gram of pot would be subject to an excise tax of $1 on sales up to $10 and a 10 per cent tax on sales of more than $10.
However, some premiers argue that provinces will foot the lion's share of the cost of regulating and enforcing the new regime and should, therefore, get the lion's share of the revenue.
Trudeau says the costs of legalization, the level of taxation on marijuana and revenue sharing are all still matters under negotiation with the provinces.
He emphasizes that the goal of legalization is not to make money.
He says all first ministers agree that the priority is to keep marijuana out of the hands of kids and out of the control of criminal gangs.
with a file from Siobhan Morris