Pot As Economic Medicine?

Marijuana activists and politicians Jodie and Marc Emery enjoy an illegal smoke.Marijuana activists and politicians Jodie and Marc Emery enjoy an illegal smoke.As world leaders scramble for ways to resurrect the dwindling economy, it seems that even marijuana is not being ruled out as a possible economic stimulus.

American citizens proposed legalizing marijuana to U.S. President Barack Obama as an economic solution in his first online town hall meeting, which he held last week.

“I don’t think that is a good strategy to grow our economy,” Obama replied.

That opinion was not shared by some Canadian politicians.
Martin Keith, the Esquimalt-Juan de Fuca MP introduced a bill in the House of Commons yesterday to decriminalize the possession of marijuana.

“The war on drugs has been a complete failure,” he said.

The Conservative Party of Canada could not be reached to comment on its drug policy. The government’s current position is that marijuana is illegal except for those who have a doctor’s recommendation.

But Jodie Emery, marijuana activist and editor of the Vancouver-based Cannabis Culture magazine, said legalizing, taxing and regulating marijuana would create jobs in the farming, forestry and textile industries.

“Farmers could run greenhouses growing the plants,” she said, adding the industry could replace forestry because hemp can be used to make lumber-like products.

To give an idea of how large the marijuana cultivation industry is in B.C., in 2000 there were 2,800 “busts” of marijuana grow operations, according to a Fraser Institute report issued in 2004.

“I estimate that British Columbia’s commercial production is probably in the range of 400,000 kilograms,” said researcher Stephen Easton, who authored the report.

In 2001, 50,000 Canadians were charged with possession, 11,000 with trafficking and 9,000 with cultivation. There are nearly two million Canadians who use marijuana, according to the report.

“Law enforcement takes up millions and millions of dollars and that money could be used elsewhere,” Emery said.

Instead of spending money we could be making it, according to Margaret Evans, a Langara College economics instructor.

“You could compare taxes collected from similar products like cigarettes to find out the cost benefits,” said Evans.
The Fraser Institute report used a similar model to produce their data.

An estimate of the retail price for a marijuana cigarette would be $8.50 with the cost of production being $1.50. This would imply a tax rate of $7 per cigarette, according to the report.

If domestic consumption is in the range of 160,000 kilograms and a cigarette is about half a gram, then tax revenue implied by this arrangement is more than $2 billion.

And depending how the local production is valued, sales of marijuana output could amount to between 1.5 and 4.6 per cent of the province’s gross domestic product.

However, what’s good for the economy is not always good for society, according to Evans.

“You always have to look at the increased social costs,” Evans said.

– Article from The Voice.