The topic we chose for this term project is “Effects of Legalization of Marijuana on the Canadian Economy”. It is a recent topic of discussion in Canadian news and it is an Important one because Canadian Community has large number of marijuana users who are in favour of this decision while some are against it. Marijuana, also known as Weed, Pot, Kush.Our purpose is to look on positive and negative sides that this legalization has brought to Canadian business community. If go over pros then, Marijuana legalization will be beneficial for Canadian economy by increase of tax revenue and erasing black markets income. Canada will attract foreign visitors as they can smoke in weed legal environment and it will be helpful for other Canadian markets as well. Also, it will create employment opportunities for production of work. If we look on the other side, marijuana users can put road safety at risk. They can suffer from many harmful diseases. It may put younger children, pregnant women at higher risk, if they started using it by thinking that it might be okay to use because government made it legal. As we through our paper, we will have a detailed look over these aspects and we will be concluding if this legalization is beneficial or not.
Research and Analysis
In 1923, the government declared that it is illegal to use marijuana for personal use, it was only allowed to use for medical purpose. In a survey done by Community Health Survey-Mental Health (CCHS- MH) in 2012, it had been found that nearly 43 percent of Canadian population are marijuana users. It was a big topic of debate whether to legalize this drug or not, because there were many international barriers that the Canadian government must overcome in order legalize marijuana. Legalization of the drug would propose that the use would be legal for adults 19 and above. On October 17th 2018, prime Minister, Justin Trudeau and the Supreme Court of Canada Legalized the drug to the public and Canada became the second country to legalize marijuana. In this process they put laws in place that will allow a person to have 1 ounce (28 Grams) for personal use only. The re-selling of marijuana is a criminal offence and can end you up with a hefty fine or even jail time.
Marijuana can affect the economy in a positive way by increase tax revenue and potentially diminishing the black markets income from the substance. With such a high demand for recreational use, the government saw it as an opportunity similar to the legalization of alcohol. Since the cost of marijuana is low it offered more room for the government to put a higher tax rate on the drug while keeping a competitive rate. Legalization would boost the economy by creating employment opportunities such as, growing and maintaining, packaging and transporting, sales and managing positions etc. From a study done by “Stephen t Easton (2004)” showed the retail price of a marijuana cigarette would be $8.60 while the production price would $1.50, giving a profit margin of $7.10. Legalization would potentially lower crime rate, and lower the amount of taxpayers money used towards law enforcement and jail facilities. Considering the deficit ($1.3 billion) Canada was and currently is in, if Canada legalized the drug back in 2012 we would be at a surplus of $2.7 billion.
Canadians value the healthcare system but it is costly to run. The annual health expenditures are $5,614 per person, tax revenues from legalization could be used optimally to cover 356,252 Canadians. An example of how much tax revenue Canadians have been wasting, we will show you a statistic on how legalization would lower the amount of criminal activity, lower taxes used towards jailing facilities and law enforcement and could be used optimally towards Canadian healthcare. Out of approximately 113,100 crimes reported, nearly 60 percent were related to cannabis operations and possessions. The provincial and federal government planned to make taxes low on marijuana, which would be 10 percent of the seller’s price and decided that out of sales revenues of 100 million they would take 25 percent leaving the remainder to the provinces department of finance. With the decision to legalize marijuana came a lot of unforeseen negatives that have affected the economy. The Canadian government has been struggling to create laws for the new policy changes and have also done a poor job of discussing whether or not the suppliers would be able to produce enough product for the demands of our country. It is estimated there will be a shortage of approximately 380 tons, $2.5 billion worth, during the first year of legalization.
Our research has shown that both pricing and supply shortages will contribute to keeping the black market in business and the levels being produced will only meet 30 to 60 percent of the demand Due to product shortages, variations, and not reaching the demands of public consumers, consumers will revert back to the black market for service. With the estimated shortages the government will only gain 800 million in revenue after the first year versus the original 2 billion estimated. With the legalization of marijuana, an illegal market still existed due to informal networks of friends, family and trusted sources. Canada alone has an illegal market of $7 billion The Canadian government has struggled gaining illegal vendors customers loyalty. These distributors can be found by the public easily through “weedmaps.com”. Weedmaps.com showed consumers in Toronto and Vancouver, vendors closest to their location. Users have the ability to look over reviews of each strain showing things such as, THC content, what kind of high they will have, more variety products such as Shatter, Dabs, Butter, Edibles, THC pills, and THC candies.
Due to the variety and how convenient this is for a customer, it takes away a chunk of consumers from the legal market. Now that we have discussed the effects of shortages and criminal activity we move on to discuss the health effects. There are less than 33 carcinogens in marijuana, like tobacco smoke, is a bunch of particles mixed in a gas-vapour. Both cigarettes and marijuana have comparable toxins such as polycyclic aromatic hydrocarbons, carbon monoxide cyanide and benzenes which have shown to lead to different cancers and reproductive issues. Studies found that cannabis use was associated with cancers of the lungs, head and neck, bladder, brain, and testis. Smoking cannabis has also been reported to cause chronic bronchitis, respiratory issues, inflammation of the large airways, and increase airway resistance. With knowing all of these health impacts legalization will increase the influx of hospital visits therefore causing a demand for more doctors and nurses creating a demand for more tax dollars being used towards healthcare. It will put young people at higher risk of using it and will cause harm to pregnant women, if they started using it by thinking that it will be safe to consume marijuana as government declared it legalize. It will put road safety at higher risk as well.
Conclusion
Hammering the final nail, we would like to reiterate that, marijuana in general context from economical point of view is rather advantageous on various aspects, briefing as, considerable surge in tax accumulation by the Canadian regimes, along with enormous incline in employment opportunities. While, the opposite picture displays high rate of inferior health quality which could bring in long-term hazardous circumstances, significantly lowering the calibre of human resources. Regarding the above-mentioned data, it is critically vivid that if the government keep in scrutiny, the few and short-term benefits of legalization of marijuana, it could hit the pinnacles of billions for the country and could help in sweeping off the smuggling and black business of this ‘devil’s lettuce’ to some extent. But from realistic, pragmatic and long-term approach it is an open invitation to push the country youth in drug addiction and squeezing the worth of human resources. The psychological problems will, inevitably, become a repercussion of cannabis consumption which would make youngsters dependent on its more and more intake. Not only this, cancer, cardiac and respiratory problems and other like diseases are expected to become common. Irrefutably, this would magnetise the tourists with the comfort of marijuana consumption in legally-permitted country, but it would be less worthwhile if it created other drug-related crimes in the rather peaceful Canadian society, which we think is unavoidable. Hence, it is finally imposed upon, that legalisation of marijuana has darker side which is likely to come up in future. Apart from this, focusing on mere short-term benefits has also made Canada a victim for becoming incompatible with UN’s international drug treaties. The world considered it a flouting act towards UN conventions. They emphasize on the assertion that why Canada did not left the three treaties beforehand and decided to quit them on short note. This recreational marijuana legalisation has also made the loss of faith in government’s words and their social credit has also decreased in the eyes of the world.
Bibliography
Ducatti Flister, Larissa. 2012. “The Economic Case for Marijuana Legalization in Canada.” Journal of Alternative Perspectives in the Social Sciences 5 (1): 96–100. https://login.ezproxy.langara.bc.ca/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=85222350&site=ehost-live score=site.
fSchwartz, Robert. 2018. the Washington Post : Democracy dies in Darkness. october 16. Accessed march 16, 2019. https://www.washingtonpost.com/news/global-opinions/wp/2018/10/16/without-proper-health-precautions-canadas-pot-legalization-could-go-up-in-smoke/?noredirect=on&utm_term=.de562acd1ecb
Hajizadeh, Mohammad. 'Legalizing and Regulating Marijuana in Canada: Review of Potential Economic, Social, and Health Impacts.' International Journal of Health Policy and Management 5, no. 8 (2016): 453-56. doi:10.15171/ijhpm.2016.63.
Hoffman, Steven J.,J.D.PhD. and Roojin Habibi M.Sc. 'International Legal Barriers to Canada's Marijuana Plans.' Canadian Medical Association.Journal 188, no. 10 (Jul 12, 2016): E215-E216. doi:http://dx.doi.org/10.1503. https://login.ezproxy.langara.bc.ca/login?url=https://search.proquest.com/docview/1804120253?accountid=37673.
Paul, Braedon R. 2018. “Cannabis in Canada: What the Upcoming Legalization of One of Canada’s Most Popular Drugs Means for Young People.” UBC Medical Journal 9 (2): 40–41. https://login.ezproxy.langara.bc.ca/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=128404257&site=ehost-live&scope=site.
Payne, Elizabeth. 'Pot and Pregnancy.' The Ottawa Citizen, June 20, 2017. https://login.ezproxy.langara.bc.ca/login?url=https://search.proquest.com/docview/1911588459?accountid=37673.
Rumball, Chris. “Driving Stoned: Marijuana Legalization and Drug-Impaired Driving.” British Columbia Medical Journal 58, no. 8 (October 2016): 477–78. https://login.ezproxy.langara.bc.ca/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=118564563&site=ehost-live&scope=site.
Schwartz, Robert. “Legalize Marijuana without the Smoke.” CMAJ: Canadian Medical Association Journal = Journal De L’association Medicale Canadienne 189, no. 4 (January 30, 2017): E137–38. doi:10.1503/cmaj.161203.
Sen, Anindya and Rosalie Wyonch. 'Cannabis Countdown: Estimating the Size of Illegal Markets and Lost Tax Revenue Post-Legalization.' Commentary - C.D.Howe Institute no. 523 (10, 2018): 0_1,0_2,25. https://login.ezproxy.langara.bc.ca/login?url=https://search.proquest.com/docview/2138498190?accountid=37673.
Valvur, Andy. 2018. UN drugs board slams Canada cannabis legalization. october 17. Accessed march 15, 2019. https://www.dw.com/en/un-drugs-board-slams-canada-cannabis-legalization/a-45932578.