By Drew Nicol
The US state of Colorado has taken centre stage for the first controversy of 2014 by declaring the legalisation of cannabis for recreational use.
The decision has followed the new trend of a liberalising of attitudes towards cannabis, which began when Uruguay became the first country to legalise the full cycle of cannabis production and use in December 2013. In the US, the successful launch of this reformed drugs policy has led other states, such as Washington and Alaska, to also take steps towards changing their own views on cannabis use.
Could this be the year that we finally see a widespread, even global reform of the current outdated and misinformed policy on cannabis? Probably not. But with Colorado and Uruguay providing practical case studies for the effects of legalisation, a re-evaluation of Britain’s own drug policy could be on the horizon.
In the UK, the legalisation of cannabis would provide several key social and economic benefits. On the social side, it would take control of cannabis out of the hands of criminals and drug dealers. This would strike a major a blow to the illegal drugs trade, by shutting off a significant source of income. How significant?
The World Health Organisation states: “Cannabis is by far the most widely cultivated, trafficked and abused illicit drug. Half of all drug seizures worldwide are cannabis seizures”.
Taking control of cannabis would also allow the British Government to regulate the manufacturing, distribution and quality of the drug; as well as monitor its usage across the country far more accurately. It would allow for greater social awareness of its effects and give researchers the opportunity to expand upon research into its medicinal potential to combat the symptoms of: cancer, diabetes, insomnia and depression; to name a few.
Since cannabis was made illegal in 1928, many scientific reports have concluded that the effects of cannabis use, within moderation, do not justify its status as an illegal class B drug. Back in 1968 the Home Office published the Wootten Report which stated:
“There is no evidence that this activity [smoking cannabis] is causing violent crime or aggression, anti-social behaviour, or is producing in otherwise normal people conditions of dependence or psychosis requiring medical treatment.”
Despite this, the public’s negative perception of cannabis has taken a long to change. However, in recent years, a greater access to information regarding medical trials and scientific studies into the affects of using cannabis has slowly begun to redress the issue.
From an economic point of view, a legalised cannabis industry would provide a profitable new source of income for the government, through the taxes that could be levied against it, similar to the current taxes on tobacco. To give you an idea just how much the British Government earns annually from tax revenues on tobacco ASH (Action on Smoke and Health), produced a breakdown of taxation in recent years:
“The Treasury earned £9.5 billion in revenue from tobacco duties in the financial year 2011-2012 (excluding VAT). This amounts to 2% of total Government revenue. Including VAT at an estimated £2.6 billion, total tobacco revenue was £12.1bn.The price of a pack of 20 premium brand cigarettes currently costs around £7.98, of which £6.17 (77 per cent) is tax.”
In Colorado, a 21 per cent sales tax has been added to the price of all cannabis products. Initial estimates show that more than $1 million was spent by customers on the first day the law changed and the State has predicted $67 million in annual tax revenue. Colorado has said that the extra revenue from taxation on cannabis will go directly towards building new schools.
Estimates for the number of people who regularly use cannabis within the UK vary wildly, for obvious reasons. According to the Daily Mail nine million people regularly smoke. The Home Office, on the other hand, believes that 6.4 per cent of adults aged 16 to 59 had taken cannabis in the last year, according the results of their 2013 Crime Survey. The Royal College of Psychiatrists opted for a more conservative estimate that two million people in the UK smoke cannabis on a regular basis.
Regardless of which source you chose to believe, these figures show that there is a significant market for cannabis within the UK and millions of pounds to be made every year from taxation. As it stands every penny of the money currently spent on cannabis is going into the pockets of domestic drug dealers and international drug cartels.
Let’s do some math: Licensed sellers in Colorado have priced an ounce of mid-quality cannabis at $159, that’s £95 to you and me. This includes the 21 per cent sales tax ($33/£20) imposed on all sales by the State. For the sake of argument let’s take the most conservative figure of estimated users within the UK, provided by the Royal Collage.
If we assume that these two million people would prefer to buy from licensed stores, then at £95 an ounce, each of these potential customers would only have to purchase cannabis once a year to raise £40 million in tax revenue. Although impressive, this figure would likely even be higher when you consider that the UK’s sales tax on similar products, such as tobacco, has traditionally been much higher than 21 per cent, and that most users would probably purchase cannabis more than once a year.
Even if you ignore the benefits of increased taxation revenue, the creation of a new industry would bring opportunity for foreign and domestic investment into the UK and would create thousands of jobs, for both highly skilled botanists and chemists, as well as in every level of manufacture and distribution.
The trend of liberalising views on cannabis has been a long time coming. It might be that this financial incentive is the focus needed to push aside old perceptions and bring the question of legalisation to the fore. The people of Colorado will be rewarded with schools for their ingenuity and forward thinking; I wonder what could we get?
