The economics of legalizing cannabis: A false good idea?

Questions about cannabis use are currently being asked all over the world, in the United States recently several states like California have legalized cannabis. In Canada, the recreational use of cannabis will soon be legal. States are attracted by the financial manna of the black market and think they can act on it.

Many candidates in the French presidential election have expressed themselves on the social issue of cannabis consumption. Some candidates are for legalization and others for decriminalization of cannabis.

First of all, it should be noted that in France, article R5132-86 specifies that “the production, manufacture, transport, import, export, possession, offer, transfer, acquisition or use” of cannabis and its resin is prohibited.

Cannabis comes in many forms and under many names. Cannabis is named after the Latin name of the botanical species Cannabis sativa, it can also be called hemp. We talk about marijuana for the leaf and haschich for the resin obtained from the plant. Cannabis is also consumed in various less representative forms such as oil.

Of course cannabis is consumed for its psychotropic effects, which are induced mainly by tetrahydrocannabinol or simply THC (other cannabinoids are present but in smaller quantities). The more THC there is, the more important the psychotropic effects are, most of the time the final product is cut, which limits the amount present.
Although there are debates about the positive effects of cannabis, it has been recognized as a drug since 1961 (Single Convention on Narcotic Drugs).

Today many politicians are thinking of legalizing or decriminalizing cannabis for various reasons; product well integrated into society, possible tax revenues, objective of reducing crime………..

But what difference between legalizing and decriminalizing? Decriminalizing means not punishing cannabis use criminally or lowering the level of offence for the consumer. Legalizing means giving a legal framework to a product or activity and can be much more restrictive. Legalizing also means that it is possible to tax this product specifically.

In fact, if we talk about this subject today, it is because there are currently a large number of consumers in France. Of course, no exact census is possible given the illegality of the practice. However, organisations such as the OFDT (Observatoire Français des drogues et des toxicomanies) are trying to increase the number of users. There are reportedly 17 million cannabis experimenters, including 4.6 million this year and 1.4 million regular users (10 drinks per month).

Approximately 80% of the price of a pack of cigarettes goes to the State and if the same thing were applied to cannabis? With such a large number of consumers, the French State is losing an opportunity, according to some, such as the Terra Nova think-tank. In 2014, the group proposed the creation of a Cannabis Regulatory Authority (ARCA) based on the Online Gaming Regulatory Authority (ARJEL). This would allow the agency to monitor THC levels and standardize them.

When we start talking about numbers, specialists do not agree, there is a range between 96 million euros and 2 billion euros !

Only there are several weaknesses in the financial arguments. First of all, it is very difficult to determine exactly the financial manna on which the State is based, and the possible benefits of legalization. Moreover, even if the upper end of the range is possible (€2 billion), public debt is €2160.40 billion (third quarter 2016). Which is relatively low.

As mentioned above, it is very complicated to know the potential number of consumers, these are only estimates (based on opinion surveys, studies of the quantities seized, hospitalizations….). It is unlikely that there will be a drastic increase in consumption, as in states where cannabis has been legalized, the increase in consumption comes mainly from the tourism generated.

Cannabis is said to produce employment? Indeed, between the store and certain production, it is estimated that nearly 20,000 jobs will be created. Here again, several things are blocking this argument. If we take the example of Colorado, where there was indeed an increase in employment with the opening of many stores………. in the first year. Because once the fashion effect is over, stores have gradually closed, as competition between quality and price is fierce. Prices that have significantly decreased since legalization. As for cannabis production, it is unlikely, it should be noted that currently drug producers (those who grow plants) are the ones who earn the least money. The value created by the product only arrives much later in the production chain and also comes from the illegality of the product (a kind of risk premium). However, in France we already have problems with our farmers on their remuneration.

Driving under the influence of cannabis multiplies by 1.8 the risk of being responsible for a fatal accident, and by 15 in case of joint alcohol consumption (which frequently happens during the holidays). In addition, France is the most cannabis consuming country in Europe in the 15-17 age group. It is difficult to put a blow on these facts but yet it is more than real. Some argue that we are already paying for this move, which does not mean that it is good to pay. However, we risk paying more, in a scenario where there is still an increase in consumption. Scenario defended by pro-cannabis.

Finally, the last argument for the legalization of cannabis will not solve the crime problem, it will only modify it. Other products may appear. The goal of the game may be to stop importing the product and to export it to countries where cannabis remains illegal. Or quite simply, in my opinion after reading UNODC documents, succeeding in selling products with a higher THC content, which has risen from 6% to 12% in 15 years. A high THC makes you more addicted but increases the risk of what is called a “bad trip”.

In conclusion, the legalization of cannabis is a bad economic idea and decriminalization even more because it would not necessarily allow the implementation of special taxation. What personally touches me in this subject is the following question; are we ready to do anything to try to bail out the state coffers? Ignoring all the dangers of cannabis to try to make millions in taxes is that really a good idea? What price to public health?

Sources :



News Weed


Terra Nova


Benjamin Suger

Benjamin SUGER

Benjamin SUGER

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