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GEORGE: Why the 'legalization' of marijuana really isn't

October 31, 2017 - 12:00 PM

 


OPINION


As Canadians move closer to the day when recreational cannabis is "legalized", we should reflect on we came to this in the first place. The prohibition of this plant in the early twentieth century was unjust and done for the basest of reasons. "Legalization" this time around really isn't. And it is easy to see why. 

John Stuart Mill was a 19th century political philosopher. He is touted as the most influential thinker behind liberalism. While holding personal liberty in high esteem in his thinking, he recognized the necessity of government intervention in some cases. But he saw restraint of personal liberty by the state as irksome and demanded a rigorous justification from those proposing laws and regulations. Proof of harm should be required before restricting personal liberty. I happen to agree.

In the case of cannabis in Canada, this standard was not only missed, they didn't even try. The "reasons" are best explored by examining what happened in the United States.

The U.S. had a long history of growing industrial hemp. For more than a century, farmers were actually required to grow it to help meet the naval demand for hemp rope. Henry Ford manufactured his first Model T using plastic panels made from hemp and ran it on hemp diesel. Imagine how different the world would be today if Standard Oil and U.S. Steel hadn't been so well connected politically.

The official narrative tied cannabis use with immigrant populations and immoral behaviour. Public demands the government "do something" eventually led to action. Cannabis was added to drug legislation in Canada in 1923, but it wasn't until after "Reefer Madness", a propaganda film was released in the U.S. in 1936, that Canadian police began to make arrests for possession and trafficking. In both countries, cannabis and industrial hemp were treated equivalently under the law.

Other than attempting to tie cannabis use to blacks and Mexicans, and relying on a manufactured moral panic as justification, no attempt was made on either side of the border to demonstrate actual harm to society when prohibiting cannabis. The financial beneficiaries of the legislation were primarily well connected monopoly capitalists and the industries they headed. What is never talked about are the millions of farmers who were generating part of their income from growing industrial hemp for markets, both local and abroad.

Prohibition was good for the black market. Organized crime was quick to exploit the risk premium for cannabis, just as they did with alcohol. Prohibition created the black market, the artificially high price drawing in producers and distributors. It is this market, one created by legislation, that the Liberal government in Ottawa hopes to eliminate using a combination of a legal production/distribution scheme and tougher sanctions on black market activity.

Will we ever learn?

It is ironic that law enforcement and local governments are asking for more resources for enforcement and regulation to deal with a substance that the federal government is "legalizing". How much does it cost these entities to enforce the current cannabis laws? How much does it cost them to enforce the restrictions and regulations around tobacco and alcohol?

Two goals are clearly evident in the new legislation. Neither has much to do with the stated intentions of eliminating the black market or restricting access to minors. First, and foremost, it is clear that the government wants to create a production cartel on their terms. Second is their attempt to capture the risk premium that prohibition itself created.

The first goal will lead to standardized, lower cost production in order to maximize profits. The regulations build a barrier to access that will drive most smaller producers out from the beginning. The innovative potential represented by thousands of craft growers will be irrevocably lost. Instead of side incomes for thousands of families, we'll end up with millions for a handful of producers and their shareholders. Things always work out when government picks winners and losers in the marketplace, right?

The second goal of capturing the risk premium for the government was misguided from the beginning, especially in British Columbia. The current penalties for possession and small scale growing have been moot for quite some time due to public sentiment. The risk premium is very small and prices have been stable since the upheaval caused by the loss to local growers of the market in Washington State. The same holds for most other provinces, especially since the confusion surrounding the bungled medical marijuana legislation under the former Conservative government. The can is open, the worms are everywhere.

The only way to get retail sale prices, and the potential revenues, back up is with harsher sanctions and more rigorous enforcement. Both are included in the legislation and both run counter to the stated intention to eliminate the black market and restrict access to kids. The primary financial benefits will flow to men in suits instead of men in leathers, but not much else will change. Kids will still be able to get a dime bag of good dope from Lenny at school.

We have a black market in alcohol. We have a black market in tobacco. Both are tightly regulated and highly taxed. We will continue to have a black market for cannabis, even after "legalization". Attempts to kill the black market with tougher penalties and harsher enforcement are laughable. It is like trying to put out a fire with gasoline. Tougher penalties lead to higher prices lead to a more profitable black market. Always has before, why it would be different today is beyond me, especially given the inevitable mediocrity and high price of products available through approved channels.

And still, no one is proposing to do the work to show the harm to individuals and society. Prohibition of cannabis remains unjustified and as Mill said, "...restraint is irksome."

— Chris George believes one measure of a just society is found in how well it balances fiscally conservative economics with social responsibility and environmental soundness in all of its living arrangements.

News from © InfoTel News Ltd, 2017
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