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(Photo: eggrole via Flickr) A new study pegs the retail market for cannabis at a half-billion dollars per year in B.C. alone – an enormous market that legalization advocates say could be taxed and regulated.

New study says B.C. bud market worth $500 million per year

The British Columbia government is missing out by not regulating and taxing the $500 million of cannabis that is sold…

By Mike Wallberg , in City Crime Health , on November 21, 2012 Tags: , , , , , , ,

A new study pegs the retail market for cannabis at a half-billion dollars per year in B.C. alone. (Photo: eggrole via Flickr)

The British Columbia government is missing out by not regulating and taxing the $500 million of cannabis that is sold locally each year, according to a study published Tuesday in the International Journal of Drug Policy.

The study — a collaborative effort between the BC Centre for Excellence in HIV/AIDS, the University of British Columbia and Simon Fraser University – derived its estimates of domestic consumption of the drug from provincial surveys of users and RCMP crime data.

“The results demonstrate how cannabis is such a highly lucrative and reliable source of income for organized crime and that a regulated system in B.C. could generate significant tax revenue for services that actually address community health and safety,” said Dr. Evan Wood, director at the BC Centre for Excellence, a senior author of the study and a founding member of Stop the Violence BC.

Stop the Violence is a coalition of law-enforcement and health-care professionals, academics and politicians who encourage informed debate about drug policy in B.C. The group supports the regulation and taxation of cannabis as a method of harm reduction.

The study says organized crime controlled 85 per cent of the B.C. cannabis market in 2001, the last year of available data. It also noted that more of the province’s murders – up from 21 per cent of the total in 1997 to 34 per cent in 2009, according to RCMP data — are attributed to organized-crime groups, who get a big part of their revenue from drug operations.

From Washington with love

The Journal report comes at a turbulent point in the history of the cannabis debate in B.C.  Colorado and Washington voted Nov. 6 on referenda to legalize the drug, the first two states to do so. The Canadian federal government has long argued that a change to drug policy here would be impossible without a change in U.S. policy.

That is going to prompt change, says Kash Heed, a Liberal MLA, former solicitor general, and Stop the Violence supporter.

“With … Washington state and … Colorado[’s votes, it] puts those two states in my opinion further left than the Netherlands.  They’ve gone to where no one in the world has ventured at this particular time.”

Heed is joined by Sensible B.C. founder, Dana Larsen, in suggesting that the U.S. vote signals a sea change in the debate in Canada. Sensible B.C. is an advocacy group committed to seeking legalization of cannabis.

Larsen, who is presently on a tour of the province to rally support for a September 2013 referendum vote on the issue, contends that there is a “real misconception [that only federal leaders can effect change] … that’s promoted by our political leaders because they want to pass the buck rather than take a stand.”

Dr. Evan Wood, a founding member of Stop the Violence BC. (Photo: BC Centre for Excellence in HIV/AIDS)

A way around the feds

One way for the province of B.C. to get around existing federal drug legislation would be to seek a Section 56 exemption to the Controlled Drugs and Substances Act. That’s the exemption that permits Insite, the Downtown Eastside safe supervised injection site, to operate.

This exemption applies to research trials and, in Insite’s case, allows drug consumption to occur without triggering criminal charges.  Wood, who is also the founding principal investigator for Insite, suggested such an exemption would be worth considering. It would amount to a research trial in cannabis regulation and taxation.

A dissenting opinion

But Darryl Plecas, SFU criminology professor and provincial Liberal candidate hopeful for Abbotsford South, believes that simple legalization of the drug will not reduce gang violence, or even gang-activity related to cannabis.

“A very small part of what’s produced in B.C. actually stays here,” said Plecas.  “The vast majority, at least 80 per cent of marijuana produced in B.C., is exported. The notion that organized crime is going to vanish is ridiculous.”

Plecas’ assertion that the domestic market is dwarfed by exports is supported by a 2004 Fraser Institute study of the B.C. cannabis industry, which quantified the total value of cannabis produced in the province at between $2 billion and $7 billion per year. That study author, Stephen Easton, also said the majority of the cannabis produced goes out of B.C.

Plecas believes policy should focus on education about the health risks of cannabis to help reduce consumption.  Failing that, he asserted that one-off legalization won’t reduce organized crime’s involvement with the cannabis trade – but that full legalization in both Canada and the U.S. may.

Authors of the Journal study are careful to point out that their sole focus was on quantifying the size of the domestic cannabis market, not conducting an overall cost-benefit analysis of full government regulation, administration and taxation.

Neither the provincial nor federal governments have responded to the study.

History of Canadian Drug and Alcohol Policy