QUESTION 1. With the help of a numerical example, explain why California and Maine tax cannabis by weight rather than by price?   QUESTION 2. Using the concept of substitutes and complements, explain with the help of a diagram how legalising cannabis may possibly affect the sales of alcohol and cigarettes. When the State government evaluates the effect of legalising cannabis on tax revenue, should it look only at the sales of cannabis? Or, should it also consider the changes in the sales of alcohol and cigarettes?

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