Government Finances and Marijuana in Quebec

by ProvocativeTrash on February 20, 2015 - 1:53pm

With Phillip Couillard looking to cut nearly $2.4 billion from Quebec spendings[14], solutions definitely have to be found. As of now, the liberal party of quebec is focusing on cuts to public services rather than creating additional revenue streams. With a healthy weed culture and minimal enforcement on individuals, Quebec looks to be one of the best prospects in Canada for marijuana legalization. The economic benefits are clear and are considerably high once imprisonment costs are factored in. While marijuana legalization always stirs public controversy in the health domain, it should be clear that the question isn't whether smoking marijuana is good or bad for you, but rather if it is better than already-available drugs such as alcohol and cigarettes (assuming they remain legal, of course). This article looks at the results of legalization of marijuana and the positive impacts such a change would bring to Quebec.

 

 

The incarceration rate in the USA is the highest in the world, with a rate of 716 prisoners per 100,000 citizens. On average, it costs 24,000$USD yearly to imprison someone and 60.3 billion $USD is spent on prisons annually [1]. Comparatively, Quebec has the lowest imprisonment rate in Canada, where only 303 were imprisoned per 100,000 [5]. Why is this?

 

According to Inimai Chettiar of the Atlantic, over half of federal convictions in the United States are drug related. While the violent crime rate and property crime rate have decreased since 1991, incarceration has steadily increased by 350 per 100,000 of the national population. This is logical, though. The “war” on drugs started in 1971 when Nixon proclaimed that drugs were America’s number one enemy. The size and power of drug control agencies grew, mandatory sentencing and no-knock warrants were introduced.  From 1980 to 1997, the number of people incarcerated for nonviolent drug offenses grew from 50,000 to over 400,000--a 700% increase. Funnily enough, a 1985 poll showed that only 2.6% of americans thought drug abuse was the nation’s “number one problem” [1].

Incarceration Rate vs Violent and PropertyCrime Rates

Source: Bennan Center

 

Marijuana was legalized in Colorado after a 68.55% voter turnout voted in favour of Amendment 64. The final results of the vote were 55.32% for and 44.68% against. Despite this, cannabis remains federally illegal in the United States, although the government stated it would not enforce federal law for this specific case in Colorado. On January 1, 2014, the first stores officially opened for business.

 

Source: The Cannabist[15]

 

One year later, Colorado recorded nearly USD$700 million of marijuana sales[15], with 44.7% being attributed to recreational marijuana. Despite such huge sales, the tax revenue clocked in at USD$44 million while the total revenue was USD$76 million when industry fees and pre-existing sales taxes on medical marijuana were considered. The turnout for 2015 looks to be even more promising, since 2014 was a year where the industry took the time to establish itself and demand took a while to ramp up. Recreational sales more than doubled from March 2014 to December 2014.  

 

While Colorado has been the most exemplary leader in the marijuana legalization movement in the United States, Washington, who also voted on legalization in 2012, has brought in over USD$43 million from cannabis related taxes [12]. In November 2014, Oregon, Alaska and the District of Columbia voted in favour of legalizing recreational use [13]. In February 2015, Senate Bill 95 was introduced in Vermont, where marijuana already has been decriminalized. The bill would legalize marijuana sale and establish a system similar to Colorado's. A 2014 poll showed that 57% of Vermonters favour the change of the state’s cannabis laws, which indicates strong support for Bill 95 [7].


Quebec now has a state that is likely to “legalize it” on its border, which arouses questions concerning the legal status of the plant in the province. Laws are rarely enforced on individuals, which already contrasts the stance that many states have in the U.S. The province apparently could use a lot of tax money derived from sale of cannabis, since it is considering austerity measures. With a lively pot culture, which is already exemplified by the success of the Tam-Tams every Sunday throughout the warmer months of the year, Quebec is a perfect place to legalize sale and use of weed. Colorado’s population stands at 5,355,866 (est. 2014) while that of Quebec is 7,903,001 (2011), nearly 147% of Colorado. With the loose assumption of the same taxation and purchase rates as those in the Centennial State, this would mean nearly $CAD65 million would be collected by the government through the taxation of recreational marijuana exclusively. If the statistics from BC are applicable to Quebec, it would mean that nearly $CAD10.5 million would saved from being spent on marijuana law enforcement, which does not include the great amount money saved from the decreased incarceration rate that would result from legalization. While the statistics related to incarcerations caused by marijuana offenses have yet to be disclosed [6], it is known that with a rate of  $CAD117 788 per year per prisoner[10], the cost is in the upper millions.

 

Along with generating a large revenue from marijuana sales, legalization would conclusively save Quebec hundreds of millions. As the industry grows, many more jobs will be created in the domain which will also have a positive impact on the economic front by reducing the unemployment rate. What cannabis legalization will do is simply make a multimillion underground industry a public one; this is essentially free money for the state--free money it desperatly needs.

 

1. "A Brief History of the Drug War." A Brief History of the Drug War. Drug Policy Alliance, n.d. Web. 11 Feb. 2015.

2. Chettiar, Inimai M. "The Many Causes of America’s Decline in Crime." The Atlantic. Atlantic Media Company, 11 Feb. 2015. Web. 12 Feb. 2015.

3. "Colorado Amendment 64." Wikipedia. Wikimedia Foundation, n.d. Web. 18 Feb. 2015.

4. "Colorado." Wikipedia. Wikimedia Foundation, n.d. Web. 20 Feb. 2015.

5. Dauvergne, Mia. "Adult Correctional Statistics in Canada, 2010/2011." Adult Correctional Statistics in Canada, 2010/2011. Statistics Canada, 12 Oct. 2012. Web. 20 Feb. 2015.

6. Dauvergne, Mia. "Trends in Police-reported Drug Offences in Canada." Trends in Police-reported Drug Offences in Canada. Statistics Canada, May 2009. Web. 20 Feb. 2015.

7. Ferner, Matt. "Vermont Could Be Next State To Legalize Recreational Marijuana." The Huffington Post. TheHuffingtonPost.com, 17 Feb. 2015. Web. 20 Feb. 2015.

8. Joseph, Max. "The Logical Thing To Do: Montreal Needs To Legalize Marijuana." MTL Blog. N.p., 4 Feb. 2015. Web. 20 Feb. 2015.

9 McCormick, Rich. "Legal Weed Earned Colorado $44 Million in Tax Revenue Last Year." The Verge. The Verge, 13 Feb. 2015. Web. 20 Feb. 2015.

10. Thibault, Eric. "Federal Inmate Cost Soars to $117Gs Each per Year." Edmonton Sun. N.p., 19 Mar. 2014. Web. 19 Feb. 2015.

11. "United States Incarceration Rate." Wikipedia. Wikimedia Foundation, n.d. Web. 17 Feb. 2015.

12. Wyatt, Kristen. "Colorado Collects $44M in 2014 Recreational Pot Taxes." Coloradoan. Associated Press, 11 Feb. 2015. Web. 19 Feb. 2015.

Barro, Josh. "D.C., Oregon and Alaska Vote to Legalize Marijuana." The New York Times. The New York Times, 03 Nov. 2014. Web. 20 Feb. 2015.

 

14. "Premier Couillard under Fire for Quebec Budget's Austerity Measures."The Globe and Mail. The Globe and

 

Mail, 20 July 2014. Web. 20 Feb. 2015.

 

15. Baca, Ricardo. "Chart: Colorado Marijuana Sales Hit $700 Million 2014."The Cannabist. N.p., 12 Feb. 2015.

 

Web. 19 Feb. 2015.

 

 

Comments

Strikingly supportive points have been made about the positive results of legalization in Colorado. It is very true that legalization of both medical and recreational pot use will in fact nourish the economy in Colorado as mentioned, and there is a great chance a similar outcome may be realized in Québec if not better. Legalization with its considerable benefits really makes it appealing for such an alteration in the laws regulating this substance. One point, however which may demote such rapid actions is still in question however. That being what happens in the long run. Is this switch from illegality to supporting the substance too much of a fast pace. Even though there has been ample research done showing the positive outcomes of pot use not only for the user but also on a financial level, there has not yet been enough research showing what happens in the long run of pot legalization to both parties. Should there be an intermediate stride to make in order to amortize the roaring effects this brisk velocity of change? Perhaps the next step does not lie in legalization. Instead maybe it would be more interesting to see the outcome of first implementing looser laws of pot use and substance control. Immediate legalization will in fact decriminalize society on the surface, but will these once titled "criminals" become completely integrated into society and will this change be beneficial to society as a whole. There is a grey area between an absolute criminal and an occasional jaywalker. An intermediary step to legalization should be looser laws of substance control before completely decriminalizing pot, that way pot culture doesn't penetrate culture, instead letting it slowly filter through. Then at that level legalization could be assessed more accurately.

I really enjoyed the way you created a precedent for the legalization of marijuana in Quebec, it greatly validated your arguments and brought lots of solid data to support them! You’ve approached the issue of legalization in a greatly utilitarian way – so as long as there is the greatest good for the greatest number, whatever is happening is ethical. However, one could also approach this ethical dilemma from a more deontological point of view. The issue of increasing the government income has been a popular one for a while, however, legalizing a previously banned substance may not be the most ethical means to this end. I think that if one considers increasing the government income as the end, then legalizing marijuana may not be the most effective means. Marijuana legalization, which being great for people who regularly use marijuana in its various forms, also comes with its some issues. An example of this would be the fact that Colorado dispensaries experience a shockingly high rate of theft. Dispensaries are not legally allowed to open corporate bank accounts in the state of Colorado, and so dispensaries are the ideal place for a thief, they have both drugs and cash. I think that if the government wants to increase their income by legalizing marijuana, then they should first create safer environments for dispensaries to operate and flourish in so that the market can maximize its profit.