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Washington State’s Initiative 502 was spearheaded by a group arguing that treating marijuana use as a crime has failed.Erika Schultz/The Associated Press

British Columbia's multibillion-dollar marijuana industry could take a "significant" blow now that two U.S. states – including its closest neighbour to the south – have voted to legalize marijuana.

The political consequences of the Washington State and Colorado referendums remain to be seen. In Seattle, advocates hailed the vote as a major breakthrough after decades of effort, although the U.S. Department of Justice could still intervene. In Canada, marijuana opponents proclaimed the beginning of the end for Ottawa's drug policies – a view the federal Justice Ministry was quick to reject.

What does not appear to be in dispute, however, is that growers of B.C. bud are about to see some of their profit go up in smoke once legal retailers of marijuana open in Washington State.

"The outcome of these votes in Washington State and Colorado is going to be a significant factor for this industry here in British Columbia," Werner Antweiler, a professor at the University of B.C.'s Sauder School of Business, said in an interview Wednesday.

Estimates vary on the worth of the B.C. marijuana industry; assessing an under-the-table market isn't easy. A government report released nearly a decade ago pegged the value at about $6-billion. Prof. Antweiler said between $6-billion and $8-billion is "realistic," and that B.C. is responsible for about 60 per cent of Canada's marijuana output.

He said other markets for B.C. bud will, of course, remain. But while the industry won't vanish, the loss of Washington State in particular will be felt.

Geoff Plant, B.C.'s former attorney-general, told The Globe and Mail last month that he believed legalization in Washington State would affect B.C.'s marijuana industry but that the effect would not be "transformational."

The Washington referendum, known as Initiative 502, was spearheaded by the group New Approach Washington. It argued that treating marijuana use as a crime had failed and it was time to try something else. Among the initiative's sponsors was law professor and former U.S. attorney John McKay – also known as the man who prosecuted Canada's "Prince of Pot," Marc Emery.

Mr. Emery remains behind bars, but the marijuana activist's wife, Jodie, travelled to New Approach headquarters in Seattle to watch the results. She said a loud cheer went up inside the beige, four-storey building when the victory was announced.

"For us to know that the state that indicted [my husband] and extradited him legalized it – first in the nation, here in Washington – that's just really profound for us and we're so thrilled about it," Ms. Emery said in an interview. She added: "This is uncharted territory."

Evan Wood, a researcher at the B.C. Centre for Excellence in HIV/AIDS and a member of Stop the Violence BC, a coalition calling for changes to Canada's drug policies, said the votes mark "the start of the house of cards coming down with respect to Canada's prohibition."

Dr. Wood stressed he's not "pro-drug." But he said prohibition has created circumstances where marijuana is more easily available to young people than alcohol and tobacco. He also pointed to public-safety concerns.

"In my perspective – and I think this is a widely held scientific perspective – all of the grow-ops and home invasions and hydro thefts and organized crime concerns we have in B.C. are a natural consequence of marijuana prohibition," he said.

But if the votes had any impact on the Canadian government's view, it wasn't apparent Wednesday. Julie Di Mambro, press secretary for federal Justice Minister Rob Nicholson, wrote in an e-mail: "Our government does not support the decriminalization or the legalization of marijuana."

Tonia Winchester, New Approach Washington's outreach director, said in an interview that the initiative will take effect on Dec. 6. On that date, people aged 21 and older will be allowed to possess one ounce of marijuana.

She said a year-long rule-making process – which will include the liquor control board and other officials – will begin Dec. 1. Farmers will need a licence to grow marijuana, and their product will be sold in standalone stores. A 25-per-cent sales tax will be applied, with 40 per cent of revenues heading to state and local budgets. The remainder of the revenue will go to substance-abuse prevention and research. The state will also establish a standard for driving under the influence of marijuana.

Ms. Winchester said "in all likelihood we probably won't see retail stores operating until end of 2013, even 2014." He said there have been indications the Department of Justice is willing to have an open dialogue about the legalization plan. She said her group has not heard from the department directly since the referendum.