Advertisement
Features

The war on pot has failed – so should we legalise cannabis?

Cannabis is legal in Canada and several US states. Now England’s chief medical officer wants to loosen restrictions on medical marijuana. The tide is turning in favour of liberalisation, says Alex Rankine

906_MW_P12_Briefing
Not for the first time, prohibition has failed

Cannabis is legal in Canada and several US states. Now England's chief medical officer wants to loosen restrictions on medical marijuana. The tide is turning in favour of liberalisation, says Alex Rankine.

What has happened?

The chief medical officer for England, Professor Sally Davies, published a report this month finding "conclusive evidence" of the effectiveness of "cannabis based medicinal products" for treating ailments such as chronic pain, chemotherapy-induced vomiting and multiple sclerosis.

Advertisement - Article continues below

The review followed extensive media coverage of the case of 12-year-old Billy Caldwell, who relies on cannabis oil to control epileptic seizures. The oil was confiscated from his mother by UK customs officials in June and could only be used following special intervention from the home secretary.

The case has sparked renewed debate about rules governing the medical and recreational use of cannabis, with former Tory leader William Hague and the chief of Durham police among those now calling for an end to prohibition of the class B substance. The British debate comes at a time when the legal backdrop for the "devil's lettuce" is changing fast on the other side of the Atlantic.

Where is cannabis legal?

Uruguay decriminalised some drug possession as long ago as 1974 and fully legalised cannabis in 2013. Portugal, meanwhile, decriminalised all drugs not just cannabis in 2001. Decriminalisation means that users will no longer incur a criminal record for their habit, although there is still a ban on sales. Legalisation implies that the supply side is also within the law: cultivation, transport and retailing are allowed.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

In the US, 31 states now allow marijuana to be used for medical purposes, with Germany, Italy and Spain among several European states authorising it for medical use. Despite being illegal under US federal law, cannabis is legal for recreational use in nine states and decriminalised in another 13. California is the latest state to bring it within the law, while Canada will become the first G7 nation to do so in October.

Why the shift?

Campaigners for legalisation have long pointed out that outlawing the drug has failed. It is widely available and teenagers say they can get hold of it more easily than cigarettes and booze. "Issuing orders to the police to defeat [the use of cannabis] is about as up-to-date and relevant as asking the army to recover the Empire," as Hague puts it. If the war on cannabis is impossible to win, we should stop wasting money on it. The cash saved on prosecutions would be supplemented by taxing the drug as we do alcohol and cigarettes (which many consider more harmful than pot).

Advertisement - Article continues below

Finally, the potency of the drug has increased sharply in recent years, with skunk, a strong form of cannabis that has been linked to psychosis, becoming more prevalent. Such strains now make up some 94% of police seizures of cannabis. If the drug were regulated by the state, the versions on sale could be made weaker and people would be more willing to come forward and have any associated mental-health problems treated.

What benefits can we expect?

"Done properly, the legalisation of cannabis is a win-win-win," says Chris Snowdon of the Institute of Economic Affairs (IEA). "Criminals lose a lucrative industry, consumers get a better, safer and cheaper product, and the burden on the general taxpayer is reduced."

Advertisement
Advertisement - Article continues below

The IEA reckons that Britain's black market is worth £2.6bn a year. If licensed pot comprised the vast majority of the market, and it was taxed at 20% VAT plus a 30% excise tax, £690m would be raised, it estimates. Legalisation also implies new jobs and businesses springing up, generating more tax revenue. The savings to pubic services, meanwhile, would amount to around £300m, says the IEA.

What does the US experience tell us?

Legalised cannabis has provided a welcome fillip for stretched government coffers. Nevada legalised marijuana last summer and derived an instant fiscal boost, drawing $20m in extra tax revenue in just six months. Colorado, the first state to legalise recreational weed, raked in $506m in taxes and fees between January 2014, when sales began, and the summer of 2017. For context, annual government spending in Colorado in 2016 was around $36bn.

Advertisement - Article continues below

A new Canadian excise tax is forecast to yield C$1bn (£580m) in extra federal annual revenue eventually. Canada is also hoping that it can steal an advantage in the growing marijuana business, with Ontario-based Canopy Growth Corporation listed on the New York Stock Exchange and boasting a market capitalisation of almost US$6bn (£4.5bn).

Somewhat surprisingly, the UK also enjoys a strong position in the medical marijuana business despite tough legal restrictions. The UN reported in March that Britain is the world's largest exporter of legal marijuana, mainly due to domestic production of Sativex, a cannabis-based medicine used to treat multiple sclerosis.

So will Britain legalise cannabis?

The recent outcry about medical marijuana has certainly given politicians cause to re-examine rules about what doctors can prescribe to their patients, but wider liberalisation looks unlikely in the short-term.

A YouGov poll in May found three-quarters of the public in favour of medical marijuana, but opinion split down the middle on recreational use, with 43% backing legalisation and 41% opposed. Just 19% of those aged 18-24 support the current arrangements, suggesting that in the long-term Britain may well join the growing global legalisation trend.

However, that appears unlikely so long as Theresa May remains prime minister. A proponent of tough anti-drug policies, during her time as home secretary May pushed through legislation to ban "legal highs" that was so broad that there were fears that even church incense had been outlawed. Still, the momentum in favour of ending prohibition is building globally as the evidence for its failure piles up.

Advertisement
Advertisement

Recommended

How the fear of death affects our investment processes
Investment strategy

How the fear of death affects our investment processes

Many of our investment decisions are driven by one simple fact: the knowledge that, one day, we will be dead. Here, in an extract from his new book, J…
2 Jan 2020
The good investments of the 2010s – and the bad
Stockmarkets

The good investments of the 2010s – and the bad

John Stepek takes a look back on which investments did well and which did badly in the decade that’s about to come to an end.
26 Dec 2019
How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Beyond the Brexit talk, the British economy isn’t doing too badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019

Most Popular

Eagle Lightweight GT: the reincarnation of the E-type Jag
Toys and gadgets

Eagle Lightweight GT: the reincarnation of the E-type Jag

Jaguar’s classic E-type sports car has been reinvented for the modern age. The result – the Eagle Lightweight GT – is a thing of beauty.
7 Aug 2020
Platinum: the precious metal that looks set to play catch-up with silver and gold
Silver and other precious metals

Platinum: the precious metal that looks set to play catch-up with silver and gold

Gold and silver continue to soar, but there's still time to get in. And there's another precious metal that looks set to go on a bull run too, says Jo…
7 Aug 2020
UK house prices hit a new record high – can it last?
House prices

UK house prices hit a new record high – can it last?

Despite the pandemic, UK house prices have hit a new high. John Stepek looks at what’s driving the surge in prices, and what it means for house prices…
7 Aug 2020