BC’s Business Case For Legalizing Marijuana

The city of Vancouver could generate millions in tax revenue from legal marijuana.The city of Vancouver could generate millions in tax revenue from legal marijuana.I’m writing this on the day marijuana entrepreneur Marc Emery is being taken in handcuffs to the U.S. to plead guilty for selling marijuana seeds from his multimillion-dollar Vancouver-based mail-order business.

Leaving aside all the galling issues about U.S. legal control over a Canadian business, the arrest of a Canadian citizen who has never visited the U.S., the inexplicable length of his expected sentence – five years incarceration in the U.S. for a one-month offence in Canada – the victimless nature of his crime and the self-defeating wounds he inflicts on himself from incendiary pro-pot campaigning, his case highlights the role of pot as the elephant in the B.C. economy.

A 2004 Fraser Institute study roughly estimated the B.C. marijuana crop’s value at around 2% to 4% of the province’s GDP. That was before the recession. Go to any small town in B.C., look around at the pine-beetle kill and the shuttered mills and ask yourself what’s still selling.

As economic cutbacks continue to slice up our social infrastructure, it’s time to look more seriously at the futility of paying vast sums to keep pot illegal: last week’s Union of B.C. Municipalities motion asking for more federal money to fight gangs is only the latest indicator of how our widely-flaunted anti-pot laws are hurting communities financially – as well as generating crime and disrespect for the law. Pot sales are fuelling the franchising of Hell’s Angels subsidiaries in small towns all over the province as other economic opportunities dry up.

Who pays and who benefits from keeping pot possession a criminal offence? Ordinary citizens pay, in police, fire-inspection, court and jail costs, while access to the plant stays as high as ever.

As the Fraser Institute study concluded: “The broader social question becomes not whether we approve or disapprove of local production, but rather who shall enjoy the spoils.” The current beneficiaries are organized criminals, small-time dealers, illegal growers, police, lawyers and related law-enforcement industries.

Legalizing and taxing pot would immediately save money. An open letter signed by 500 U.S. economists, including Milton Friedman, suggested that replacing pot prohibition with taxation and regulation in the U.S. would save $7.7 billion annually and generate $6.2 billion a year in new revenue if legalized marijuana were taxed like alcohol or tobacco. The Washington legislature is looking at a 2010 bill that would reclassify possession from a crime to a civil infraction with a $100 penalty. A legislative committee estimates a net financial gain of $17 million a year if the bill passes.

Tobacco-like controls, regulations, age restrictions and warning labelling would mitigate abuse. Police could cut back forces and focus on real dangers.

There are a multitude of barriers to making this happen, not least of which is jeopardizing our relationship with our American neighbours. But how long are they going to hang onto anti-drug laws that have turned their southern flank into a drug state run by warlords? Pressure to decriminalize is very much alive south of the border. As far back as 1972, a bipartisan Congressional commission recommended decriminalization. Fourteen states representing a third of the U.S. population have since decriminalized marijuana use. Cities like Seattle have officially made adult marijuana use the “lowest law-enforcement priority.”

B.C. has an edge in the pot business. Give Emery credit for putting Vancouver on the international map as a pot hot spot. Canada already has more than 2,000 federally sanctioned medical-marijuana growers – some in grow-ops near you. We have expert growers in every municipality in the province. Just think if they could grow in greenhouses instead of converting wood-frame homes into agricultural fire traps.

The current economic crisis adds financial punch to the already strong arguments for ending this harmful charade and spending our scarce public dollars on creating benefits, not breeding crime.

– Article from Business in Vancouver on October 6, 2009.