Justin Trudeau's vow to legalize marijuana – made without much thinking, one suspects – was one of his signature campaign promises. It was intended to brand his party as progressive, youthful, and enlightened. And the time seemed right. Most Canadians agree that it's time to make it legal.
But when the government unveiled its long-awaited legislation – on the eve of a long weekend – our hip Prime Minister was nowhere in sight. He left the job to a bunch of hatchet-faced ministers, who grimly assured us that this was going to be all about law and order and harm reduction, not fun. Clearly, the government hoped that everyone would get distracted by the holiday and move on.
Legalizing pot is trickier than it looks. Some of the benefits have been wildly overstated, and some of the consequences are unintended. Take, for example, the Liberals' blithe assurance that tough new laws will, if anything, reduce the availability of pot to youth. This ain't gonna happen. It hasn't happened in Colorado and it won't happen here. Nor is it easy to believe that all those new laws will be vigorously enforced. Do you really think the cops, who barely have the resources to fight drug crime now, will waste their time busting teenagers for possession?
As for the black market, it will change but it will not disappear. Not everyone will be willing to fork over the high prices (to be determined) that will be charged in the legal market. The higher the price, the greater the opportunity for illegal suppliers to grow their market share. "If people can save significant amounts of money, then they will," says security and crime expert Christian Leuprecht, who is a professor at the Royal Military College and Queen's University. Consider contraband cigarettes, which now account for a whopping 30 per cent of the Ontario market. Why would pot be any different?
Marijuana costs peanuts to produce. But in the U.S. sky-high taxes and onerous regulations make legal pot vastly more expensive than the illegal stuff. That may not matter to well-heeled casual users, but it matters a great deal to downmarket folks, who make up a large part of the consumer base. In Oregon, illegal marijuana still accounts for more than 35 per cent of the market. "The new system has clearly not replaced or even threatened, corner dealers either in Washington or Colorado," Tom James wrote in The Atlantic. Meanwhile, Uruguay – another poster-country for legalization – has become a major dope distribution hub for South America.
Another lucrative business for the black market is export sales. A large amount of Colorado pot is sold illegally to neighbouring states. Canada's already robust illegal export business could get a significant boost too, says Prof. Leuprecht. "It is naive to believe all our dope will stay here." He wonders how many friends that will make us south of the border.
The provinces are not happy about all this, and for good reason. It's they – along with municipalities and local police forces – that will bear the burden of enforcement, regulation, extra health-care costs, and public safety campaigns. It will be up to them to figure out distribution networks, age of majority, and how to do roadside safety checks. (The only safety check currently on offer is a saliva test that doesn't work yet.) The feds haven't promised one new penny for any of it, and enforcement could be uneven, to say the least.
There will be winners, though. The biggest winners will be the current incumbents in the business. Despite the fantasies of nostalgic hippies and pot libertarians, there will be no room in the market for artisanal growers or idealistic mom-and-pop pot shops. They won't be able to compete. Waiting in the wings are well-capitalized investors who are poised to set up massive grow-ops and sophisticated retail and mail-order chains, with the expertise and lawyers to help them through all the hoops that governments devise. Many of these pot pioneers are intimately familiar with the workings of government, having been in it themselves. As in the U.S., they will work closely with politicians and bureaucrats to make sure the regulations are as advantageous and market-friendly to themselves as possible.
The road to legalization is paved with good intentions – and also massive potholes. With more urgent matters on his plate, Mr. Trudeau might well be wondering whether the hassle is worth the price.