All Business

A CASE FOR MARIJUANA INC.

Legalizing Canada’s biggest cash crop is all about supply and demand

STEVE MAICH November 22 2004
All Business

A CASE FOR MARIJUANA INC.

Legalizing Canada’s biggest cash crop is all about supply and demand

STEVE MAICH November 22 2004

A CASE FOR MARIJUANA INC.

All Business

STEVE MAICH

Legalizing Canada’s biggest cash crop is all about supply and demand

WHEN THE DAY finally comes that this country legalizes the cultivation and sale of marijuana, compassion will not figure into the decision. Nor will weed be legitimized for the sake of any real or imagined medicinal benefits. And it won’t be the various appeals to personal liberty that will swing the pendulum of our antiquated drug laws. No, when Ottawa finally abandons the costly and futile effort to maintain pot prohibition, it will be the inescapable logic of the market that casts the deciding vote.

Hard as it may be to believe, Canada’s biggest agricultural product is an illegal plant.

Various estimates peg this country’s cannabis trade at considerably more than $7 billion in annual sales—twice as much as pig farming brings in, and almost three times more than wheat does. Even the mighty cattle industry, at $5.2 billion a year in revenue, lags behind the marijuana business for sheer size. There is no formal market and cultivation has to be done surreptitiously, and still, nothing brings in the green like grass does.

So while timid federal politicians debate baby-step improvements to existing drug laws, a thriving industry carries on, completely indifferent to the government’s dithering. The latest turn in the drug debate came this month when the Martin Liberals re-tabled legislation to decriminalize possession of small amounts of cannabis, while simultaneously proposing to increase maximum sentences for cultivation and trafficking. It’s the same old drug war rolled in new papers. And even this maybe too radical for parliamentarians.

Thus far, no one has had the courage to stand up and call for real progress: legalization, regulation and taxation. As a result, the massive financial opportunity offered by making marijuana a commercial product remains out of reach. And while Ottawa fiddles, Canada smokes. Every day across this country people from all walks of life are getting high, getting hungry and falling asleep. If this sounds like a crisis to you, then you’re qualified to be the Conservative justice critic.

Earlier this year, The Fraser Institute released a study of the British Columbia pot industry, estimating that the Canadian market alone was worth as much as $4.4 billion in 2000. That doesn’t include exports. And the market is growing: according to the study, the number of Canadian pot smokers has risen by two-thirds in a decade. “To anyone with even a passing acquaintance with modern history, it is apparent that we are reliving the experience of alcohol prohibition of the early years of the last century,” the report said.

The same conservative think tank that normally calls for privatized health care and tax cuts is now championing legalized pot, projecting that government could easily reap over $2 billion in annual revenue by taking control of the industry. This should be a sign to anyone in Ottawa with the guts to face it: when the neo-cons and hippies start agreeing on policy issues, it’s a pretty good sign you’ve fallen behind a social trend.

NO POLITICIAN has yet had the courage to stand up and call for real progress: legalization, regulation and taxation of the cannabis industry

Just as importantly, the report points out, every dollar reaped by government regulation of the pot industry would be a dollar taken away from the criminal gangs that run the industry today. We’d save billions more by eliminating the staggering costs of a losing war. In 2001, Auditor General Sheila Fraser said the federal government was spending close to $500 million ayear fighting the drug trade. Roughly 95 per cent of that goes to enforcement and policing, and two-thirds of the country’s 50,000 annual drug arrests are for cannabis offences.

The big question, for most lawmakers, is how the United States would react to cannabis legalization in Canada. Opposition politicians are already fretting over potential trade retaliation, and U.S. Ambassador Paul Cellucci warned last week that border traffic might be slowed if our drug laws are significantly relaxed. That would be a shame, for both countries. Trade is a two-way street, and if the U.S. wants to hobble its own economy for the sake of keeping the scourge of marijuana at bay, then that’s their right. But I suspect the bluster would pass soon enough. The amount of marijuana seized at the Mexican-U.S. border is more than 100 times greater than the amount caught heading south from Canada, and that hasn’t dampened the Bush administration’s eagerness for closer ties with Mexico.

As for the other familiar yarns about the dangers and evils of smoking a little weed— that it’s addictive; that it is a “gateway” to hard-core drug use, etc.—it’s worth reading the 2002 report of the Senate Special Committee on Illegal Drugs. It bluntly explodes many of those myths, propagated for decades by police forces and morality squads. After exhaustive study, it concludes that pot is a minimal health risk when used in moderation, and poses fewer social costs than other—legal—vices, like booze and cigarettes. In the words of the committee, “It is time to recognize what is patently obvious: our policies have been ineffective, because they are poor policies.”

Two years have passed since the Senate recommended legalizing and regulating marijuana along lines similar to the tobacco industry. Perhaps one day the feds might find the courage to heed that advice and harness the power of supply and demand. In the meantime, all that potential tax revenue will keep rolling away while politicians and moralists keep blowing smoke.

steve.maich@macleans.rogers.com