The Shotgun Blog
Thursday, August 05, 2010
Canada's economy and marijuana
This November, in an effort to increase tax revenue, California will hold a referendum on whether or not to legalise the cultivation and use of marijuana. If passed, the change in law would be devastating to the Canadian economy, halting the flow of billions of dollars from the US into Canada and eventually forcing hundreds of thousands into unemployment.
Over the past 20 years, Canada has developed a substantial and highly profitable marijuana industry that is almost completely dependent on the US market. Between 60 and 90% of the marijuana produced domestically is exported to the US via cross-border smuggling operations. It's exactly like the alcohol prohibition of the 1920s, only far more sophisticated and more profitable. The establishment of a legal industry based in the US would likely cripple these exports overnight.
Due to its contraband nature, it's difficult to determine exactly how much marijuana contributes to the Canadian economy, but a number of agencies and economists have estimated that it is in the range of $20bn per year (£12.5bn), making it Canada's single largest agricultural product. The bulk of production is based in British Columbia, where it employs a labour force of 250,000, roughly one in 14 adults. Although strict financial controls are often credited as the source of Canada's economic resilience, it's worth pointing out that marijuana production often insulates communities from larger economic phenomenon.
"Hundreds of thousands into unemployment"? Please--put down the bong. Such vivid hallucinations you're having. I know the folks at The Guardian don't go particularly deep in math, but is anyone forgetting that the U.S. has 49 other states? And estimates of the size of the "marijuana industry" are notoriously fantasy-ridden. They're also pure speculation, since this industry doesn't file quarterly reports.
Seriously, P.M.--The Guardian?
Posted by: Shane Matthews | 2010-08-05 8:21:52 AM
There in marijuana 'activists' in California who are lobbying AGAINST the referendum because they do not want 'corporations' controlling the production, distribution and marketing of marijuana.
They realize that the only reason pot-addled hippies can make a living from marijuana is because they have no competition from actual businesspeople.
Posted by: Anonymouse | 2010-08-05 8:56:21 AM
*1 in 14 adults in BC are forced to work as slave labour in the marijuana mines
4 in 14 BC residents work in fast food just to feed the BC pot slave miners and the millions of zombie smokers
7 in 14 BC adults smoke it because it's there
7 in 14 BC youths smoke it because they are there
12 in 14 other Canadian residents smoke pot so they can pretend they are in vacation in BC
everybody else is pissed off at the BC stoners for being assholes
Most of the marijuana produced in Canada is sold and consumed locally, because there are so many absurd stoners everywhere who devote their lives to the 420 economy and blame the Conservatives Government for the high prices they must pay for their drug.
The production and distribution of domestic canadian marijuana is very uneven and in many places, downright chaotic bordering on stupid
Whipehead economic professionals estimate that as low as 0% or even as high as 927% of the pot crop in Canada is grown by people who actually know what they are doing and then smuggled into the US by pothead tools. The US marijuana market continues to be dominated by Mexican contraband.= in spite of the heroic efforts of certain enlightened guests of the US Prison system who attempted to "Overgrow the Government" by selling pot seeds over the internet.
there- that was my opinion, based on hearsay and casual notion, just like the writer in the Guardian, nothing adds cred to a fantasy than a generous sprinkling of % % % %
Posted by: 419 | 2010-08-05 8:57:05 AM
I have trouble with the number of 250,000 people employed in BC Pot operations. That represents 25% of the province's workforce. I could believe perhaps, 10,000 to 25,000. But, just as the removal of corporate income taxes would throw hundreds of thousands of accountants and lawyers out of work, their prospects for re-employment would likely be better than your average Quadra Island pot grower. The agriculture industry would be screaming for subsidies within months of legalization due to the low production cost, shrunken market and crashing price of silly smoke. The real unemployment would be the million or so prisoners released from US human warehousing facilities. Even Emory might have to find a different line of work.
Posted by: John Chittick | 2010-08-05 10:20:32 AM
One very vital fact is missing from the article, and that is that drugs fall under federal jurisdiction in the USA. Californians can dream all they want (they do excel in that) but they cannot legalise marijuana without the feds' consent.
Posted by: Alain | 2010-08-05 11:19:14 AM
Given the way federal judges have been ruling of late, Alain, I don't expect that'll be much of an impediment. This generation of jurists seems to have scant respect for the law, unless it's a law they wrote from the bench.
Posted by: Shane Matthews | 2010-08-05 11:27:26 AM
Shane, that may very well be, however states have no jurisdiction in this area. That was all I wanted to point out. Of course if the Feds decide to legalise it or rather to decriminalise it, then it becomes a different matter for both the USA and Canada. Personally I do not buy all the extreme anti marijuana propaganda any more than the anti smoking hysteria or even the zero tolerance for drinking and driving. There is a big difference between drunk driving and what is now being enforced. I choose not to smoke marijuana just as some choose not to drink any alcohol. I suspect that once the government discovers a way to milk the marijuana industry like it has the alcohol industry, it will be decriminalised.
Posted by: Alain | 2010-08-05 2:45:46 PM
@Alain: In Reason Mag, I read that over 90% of drug enforcement is carried out by state/local enforcement, so if they stop, the feds can cry all they want it doesn't matter - de facto legal. California may actually do something right.
Posted by: Cytotoxic | 2010-08-05 5:33:12 PM
In Reason Mag, I read that over 90% of drug enforcement is carried out by state/local enforcement, so if they stop, the feds can cry all they want it doesn't matter - de facto legal.
Oh, well, if you read it...
Of course, if any of that pot makes it out of California, interstate commerce laws are being broken, which means there’s not a question in the world of it being federal, and the State of California being a participant in this, might actually find itself sued by its own Federal government. To say nothing of setting up “border checks” that might make it very hard for California to import or export anything at all.
The Feds have never liked rebel states. And with California's economy in the toilet, they’re in a less advantageous position to dictate terms.
Posted by: Shane Matthews | 2010-08-05 7:06:27 PM
Of course the California dealers are campaigning against pot legalisation! If that ever happens, the bottom will drop out of the market and no one will make any money. Very few people will grow pot because there will be no profit in it, and people will either have to resort to growing their own for personal use or go without. Many stoners may not want to go to the effort to grow their own and give up smoking because it is too much work, while fast food workers depending on the "munchies" market may lose their positions as people who do not smoke pot will not get the "munchies." Legalisation in California will be bad for stoners across the 49th parallel, as there will be little or no market for "B.C. Bud," as local product, even with heavy state taxation, will be far cheaper and more available!
Posted by: Mike 71 | 2010-08-06 7:52:40 AM
"12 in 14 other Canadian residents smoke pot so they can pretend they are in vacation in BC
everybody else is pissed off at the BC stoners for being assholes"
Hate to burst anyone's bubble, but, most of us have very little interest in vacationing in BC. Nothing against you folks,...well maybe just a little against you folks, but if I want to look at big rocks, I can stay in Alberta. If I want to rub shoulders with rude, arrogant, confused, over confident people, I'll just go to Calgary for the weekend.
Posted by: dp | 2010-08-06 11:37:22 AM
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