Pubdate: Thu, 08 Nov 2012
Source: Edmonton Journal (CN AB)
Copyright: 2012 The Edmonton Journal
Author: Tamsyn Burgmann
Page: A11


Economic impact unclear as two U.S. states vote for legal use

VANCOUVER - The future appears hazy for British Columbia's thriving
underground pot industry, even as two U.S. states have voted to allow
citizens to legally use the drug recreationally.

Business consequences could range from mild to sending marijuana
producers' livelihoods up in smoke, depending on how much of the
estimated $6 billion to $8 billion annual economy is currently being
exported south of the border, analysts say.

Opinion on the impact varies considerably, but those advocating for
Canada to adopt a more evidence-based policy on marijuana say this
week's votes mean Canada is falling behind the U.S. in developing
evidence-based policy.

Voters in Washington State and Colorado passed ballot initiatives held
alongside the U.S. presidential election on Tuesday that remove
criminal penalties for the possession and sale of recreational
marijuana. Should the U.S. federal government not challenge the
initiatives, which directly opposes federal rules, the states will
begin regulated sales of the drug.

A similar initiative in Oregon failed to pass.

"Obviously we're not sending the army to the B.C.Washington State
border because of the vote," said Dr. Evan Wood, founder of an ongoing
campaign for marijuana legalization that includes health, legal and
justice professionals.

Canadian opponents of legalization have often noted that
decriminalizing pot would prompt a negative reaction south of the
border that could make it harder for goods and people to cross back
and forth, Wood noted. "This vote is obviously going to take that tool
away that I think has quite successfully quashed debate on this topic
in Canada."

The coalition, called Stop the Violence BC, contends prohibition of
marijuana is a failed strategy that fuels bloody gang wars and
facilitates the influx of guns and cocaine when it's traded into the
U.S. via organized crime.

The value of the export pot market cannot be easily quantified because
it's based on smuggling. But experts who believe it's hefty argue the
market for well-known "B.C. bud" will shrink simply because it won't
be in such high-demand anymore in places like neighbouring Washington
State, where users will be able to make legal purchases.

"It may not wipe out the entire market but probably wipe out most of
it," said University of B.C. economics Prof. Werner Antweiler, who
says a substantial amount of B.C.'s marijuana - in the range of
two-thirds - is pushed into the U.S. west coast.

If that is the case, he said the impact would be felt most in the B.C.
Interior, where a sizable quantity of the illegal crop is cultivated.

"They will lose production. These communities will suffer certain
amounts of setbacks in terms of the economic welfare, simply because
this money that's being made is percolating in those communities,"
Antweiler said. "If you take $8 billion dollars and even take 20 per
cent off or 30 per cent off, it will have a somewhat noticeable impact."

RCMP, however, say the "majority" of marijuana cultivated in both
Canada and the U.S. is produced to support domestic demand, according
to 2004 border drug threat assessment. Although police say
Canadian-produced marijuana accounts for only about two per cent of
overall U.S. marijuana seizures, they note authorities on both sides
are concerned and have found it to be an upward trend.

One longtime marijuana activist in Nelson, B.C. - an Interior city
that has a reputation for its pot industry - argued the state ballot
initiatives won't be consequential for the B.C. market at all.

"The whole B.C. bud phenomenon, this cross-border thing, is blown out
of proportion," said Dustin Cantwell, who has hosted a weekly local
radio program about drug policy for 13 years.

"We have enough people smoking marijuana in our country who are
willing to pay money for it to make (the industry) worthwhile here. We
no longer have to cross the border, and there's no longer American
people coming up to buy weed up here."

Former B.C. Attorney General Geoff Plant, who supports the Stop the
Violence coalition, said he believes the initiative could have some
impact on the pot market, but agreed other buyers are always available.

"It's not going to be transformative," he said. "Washington is
certainly a market of some size for B.C. bud, but the whole of the
United States is the market for B.C. bud.

"We're not going to put an end to organized crime to control the
cannabis market in British Columbia until we get policy change here in
Canada and in the United States."

Plant and the coalition argue it's crucial to change Canadian law so
the underground economy will come to the surface, where marijuana can
be produced, regulated and taxed under strict government control.

In Washington, some of the tax revenue from potential sales would be
earmarked for addictions programs and other health initiatives, and
the coalition believes the same should happen in Canada.

A day after the initiatives were passed, a spokeswoman for federal
Justice Minister Rob Nicholson reaffirmed that the Conservative
government does not support the decriminalization or legalization of

"Our government will continue to work with our American neighbours to
ensure that our border is open to trade and closed to criminal
activity," Julie Di Mambro said in an email.

A 2003 committee report to the Senate on illegal drugs pegged the B.C.
industry at $6 billion, while the Fraser Institute estimated in a 2004
analysis it generates $7 billion annually. A report by the University
of the Fraser Valley's Centre for Public Safety and Criminal Justice
research said B.C. pot grow-ops generate $3.6 billion.
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