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Adam Bornstein Claudia Manley Writing 2121F 21 November 2011

Canadian Legalization of Marijuana Will Result in Economic High

Abstract: In a second year writing course we were asked to write a final research paper on a social and/or economic issue. After much deliberation, I put together a sturdy research based argument for the legalization of Marijuana in Canada. This paper outlines my case whilst attempting to account for as many externalities as possible in a brief and succinct essay.

By maintaining a general prohibition on marijuana production, distribution, and exhibition, the Canadian government has been holding back an industry that could efficiently and effectively solve the financial problems brought on by the 2008 recession. In the same year, 16.5% of Canadians smoked marijuana, despite the fact that it was only legally available medicinally to a miniscule fraction of those citizens, proving the prohibition has been generally ineffective (Khoo). Decriminalization may alleviate the frivolous financial burden the prohibition inflicts upon the legal system; however, the problems of the black market and potential of the industry will remain ignored. Only legalization of cannabis will allow for the drug to be properly mandated and controlled in society. Proper analysis of the chemical plant reveals not only that oppositional arguments prove to be faux, but also the untapped capabilities it posses that, once properly realized, would benefit several areas of the Canadian economy. By subverting potential negative effects, legalization of marijuana will create both new jobs and renewable energy opportunities, while removing the need for current government

2 Bornstein expenditure on maintaining an unsuccessful prohibition. The Canadian government permits, in some cases, for marijuana to be grown for the sole reason of medicinal use; alienating the drugs other possible applications. Hemp is also outlawed under the same bill and it has thousands of material applications including paper and fabric production (The Union). Focusing on one specific use, Natural Resources Canada revealed that if the Canadian government were to initiate a program to harvest the marijuana plant to cultivate bio-fuel (similar to corn, the stem is processed into an eco-friendly resource), a billion dollar industry could be created (Gerber, 107). This industry would not only create thousands of job opportunities, amongst the processes from growth to exhibition, but also a new, renewable, and, environmentally-friendly energy source that would prove to be both economically and politically invaluable. To quell the opposition from black market growers, whose well being is threatened by legalization, the government might enlist their help in an effort to essentially tap into the resource of their expertise in a way that would be fiscally beneficial to both parties. Nonetheless, the increased presence of new energy, which will allow Canada to have a lower dependence on foreign oil, in combination with new jobs, would increase Canadas GDP substantially (Gerber, 106). In an industry built on the drug itself, but also in general, the opposition argues that the increased presence and availability of cannabis will create a lazy and lackadaisical workforce. If this were true then it could be observed in the productivity of countries that have legalized marijuana and are economically similar to Canada. The graph below notes the productivity (GDP per hour worked) of every country in the OECD in the year 2007. Analysis reveals that the Netherlands [blue circle], a country

3 Bornstein where marijuana has been legalized for decades, has a higher productivity rating than not only Canada [red circle], but also every other country that is a part of the G8.

Furthermore, it needs to be understood that legalization does not entail the drastically assumed and feared free for all in regards drug usage. It simply means that cannabis would be treated the same as alcohol and society would no longer be at risk to the dangers of the black market. The black market has no qualms about selling to minors, and also pairs the sale of illicit substances such as marijuana with hard drugs that are actually harmful (The Union). This is the basis of the gateway argument, which is subverted by regulated sale. Government control by license and social regulations would make ID a requirement to purchase the drug and public use (especially on the job) would remain illegal. In a 2005 study at Harvard, Dr. Jeffrey Miron concluded that as well as creating a new industry and jobs, the legal regulation of marijuana would result in the saving of an

4 Bornstein additional 15.3 billion dollars (Miron, 2). The legal and auxiliary fees consumed by the police and judicial system would be eliminated along with the prohibition. The United States spends 1.6 billion dollars in resolving court cases related to marijuana each year, despite the fact that they smoke 3.9 % less marijuana than Canadians (Gerber, 45). Nevertheless, only 33% of people charged in cannabis related cases are convicted and proven guilty, which makes this an unjustifiable expenditure of financial resources (Gerber, 48). Not to mention that legalization would also end the countless careers that are impeded by a criminal record that was acquired from charges for minimal possession. The obvious rebuttal to such a conclusion is that there will in fact be an increased need for the police and courts once the country is given abated access to the narcotic. One might argue that this free range will increase the number and intensity of users. However, if the prohibition is lifted then consumption will actually decrease. According to Dr. George Akerlof of the University of California at Berkeley, forbidding people things they like or think they might enjoy only makes them want those things all the more. By removing this factor, the rebellious glamour of smoking marijuana will decrease consumption (www.prohibitioncosts.org). Looking again to the Netherlands, the rate of consumption observed is astoundingly 6.5% less then the United States, directly proving Dr. Akerlofs hypothesis about the mischievous draw to illegal consumption (www.unodc.org). Albert Einstein also understood this relation to prohibition when he said, it is an open secret that the dangerous increase of crime in this country is closely connected with [prohibition]." Furthermore, in 2001, 47% of all Canadians supported the legalization of marijuana, which proves that it is not just teenagers who are interested in the legalization of marijuana (Khoo).

5 Bornstein Alcohol and tobacco are to blame for extensive medical costs across the country, and, are therefore appropriated with a sin tax. Cannabis has been proven to have no harmful health effects with moderate use, and minimal effects with excessive use (The Union). It will be less detrimental on the medical system than the effects of smoking tobacco; However, it is obvious that all smoke is bad smoke for our bodies. Although, unlike tobacco, which causes 11 billion dollars of damage to our healthcare system, legalizing marijuana would only cause 4 billion dollars of damage (www.prohibitioncosts.ca). A similar sin tax applied to these goods would result in a tax revenue increase of approximately 6.7 billion dollars (Miron 2). This sin tax revenue would already be on top of the gross mark up that the government would place on cannabis. The Canadian government currently purchases medicinal marijuana for 33 cents per gram; meanwhile it is sold illegally for an average of $10 per gram (The Union). A potential monopoly would result in massive profit. The current state of Canadian law regarding marijuana has allowed for a massive black market to develop that is the reason for many of the oppositional arguments surrounding the drugs legality. Legalization would unleash the potential for new industry that would fuel our economy with new jobs, new energy resources, and a more ecological environment. Government regulation would remove the black market along with the massive costs that it incurs on our legal system. Suffice to say, even if the approval for marijuana legalization in Canada is a hair below majority, the population would vote unanimously for new jobs, a renewable energy resource, and, significant financial gain.

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7 Bornstein Works Cited "Budgetary Benefits of Legalizing Marijuana." Costs of Marijuana Prohibition: Economic Analysis. Web. 7 December 2011. <http://www.prohibitioncosts.org/>. "Do the Benefits Outweigh the Costs?". The Economist. 27 May 2009. Web. 7 December 2011. <http://www.economist.com/blogs/democracyinamerica/2009/05/do_the_benefits_ outweigh_the_c>. Einstein, Albert. "Marijuana Quotes." Herbal Smoke at Legal Bud Head Shop Marijuana Alternatives Herbal Smoke Blends. 7 December 2011. <http://eazysmoke.com/marijuana-quotes.htm>. Gerber, Rudolph J. Legalizing Marijuana: Drug Policy Reform and Prohibition Politics. Westport: Praeger, 2004. Khoo, Lisa. "CBC News Indepth: Marijuana." Canadian News Sports Entertainment Kids Docs Radio TV. CBC.ca. 7 December 2011. <http://www.cbc.ca/news/background/marijuana/marijuana_legalize.html>. Miron, Jeffery. "The Budgetary Implications of Marijuana Prohibition." (2005): 1-28. Harvard University. Web. 7 December 2011. <http://www.prohibitioncosts.org/MironReport.pdf>. Moran, Andrew. "Majority of Canadians Still Support Legalizing Marijuana." A Global Citizen Journalism News Network. 7 December 2011. <http://www.digitaljournal.com/article/290717>.

8 Bornstein The Union Dir. Bret Harvey. Perf. Adam Scorgie. Score G Productions Inc., 2008. Film.

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