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Affecting the World Through Health
A Global Health Initiative

The political and economic implications of legalizing Cannabis in Canada



It is no longer news that Cannabis or Marijuana is now legal in Canada. This new law comes with several implications including health, social, political and economic. We will attempt to discuss some of the political and economic implications here in.

First off, let us clarify the two most common political terms used around this new law- decriminalization and legalization. Decriminalization is the removal of the criminal penalties associated with or imposed for personal marijuana use even though the manufacturing and sale of the substance is illegal. On the other hand, legalization is the termination or abolishment of laws banning the possession and personal use of marijuana for adults and includes decriminalization.

The recent legalization and undeniable public acceptance of using recreational cannabis has raised considerable public concern and has been very controversial due to moral, ethical, public health, legislative and logistic issues associated with it. Results from past public opinion polls showed that majority of Canadians will be happy if marijuana is decriminalized or legalized. Specifically, a poll conducted in 2015 by the Forum Research revealed that 68% of Canadians favor decriminalization and legalization of marijuana.

Legalization will enable the Canadian government to regulate the production, sale and use of marijuana just like tobacco and alcohol.

The proponents of the legalization argue that the use of marijuana is not associated with income generating crime because it is an insignificant constituent of budgets and presents less danger in terms of possibility of overdose, risk of tragic intoxicated behavior and risk of addiction. Contrarily, the opponents of legalization argue that it will increase use, abuse and accessibility to minors.

Economically, one of the major economic effects of legalizing cannabis is a possibility of increased government revenue through the taxation imposed on cannabis and its products. The current legalization is creating a completely new industry- probably a whole new economy, and will likely generate new companies, jobs and stock market earnings, in both businesses and the society as a whole.

According to a report by the Canadian Imperial Bank of Commerce (CIBC), the legalization of cannabis could create an industry with an annual profit of $10 billion, of which the government will collect at least 50% – depending on the tax rate for such potential industries.

Despite possible drawbacks and many uncertainties surrounding the fledgling legalization, it would substantially reduce the Government’s spending on the enforcement of the federal cannabis laws and allow saving the tax money which was previously spent on prohibition, arrests, criminalization and law enforcement. Statistics Canada reported that there were 73,000 marijuana-related criminal offences (67% of all police-reported drug offences) in 2013.

The decriminalization of cannabis will also reduce the size of Canada’s black market and all its consequences for the society. However, it may concurrently result in public health problems such as increased uptake of the drug, more road accidents and injuries as a result of driving under the influence. These problems all have economic consequences.

To ensure that the government actually saves money by reducing cannabis-related arrests, legalization should be accompanied by comprehensive strategies to keep the drug away from minors as well as increase public awareness and knowledge sharing about the harmful effects of the drug.

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