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Legal & Regulations

What Can Canada Expect From the USA’s Experience With Legalization

Since 2012, 10 states in the USA have legalized cannabis, California being the most recent state to do so in 2016. Increased legalization by state governments has revealed a number benefits and issues and offers some insights for Canadians as national legalization becomes a reality here.

Issues of security and legality persist for growers and consumers of cannabis despite state legalization. On the Federal level, cannabis production and consumption remain illegal, which has discouraged banks and major credit card companies from involvement in the industry.

All transactions relating to cannabis are on a strictly cash basis. Dispensaries have been faced with the high costs of maintaining high security premises to protect their assets. This blind-eye situation between state and federal governments exposes the industry to considerable risk and uncertainty.

The example of Washington State, which pioneered the revolution six years ago, offers some insights on the economic benefits of legalization; in 2017 it brought in about $317 million in tax revenue from the cannabis industry.

Colorado earned about $247 million over the same period, roughly equal to the tax revenue it received from craft beer. This tax income, already in the billions in legalized states, has made considerable contributions to funding community projects and infrastructure development.

The potential for significant positive tax revenue is promising in Canada, and for other states considering legalization. Given that the cannabis industry is still in its preliminary stages, there is also the strong possibility that tax revenues will continue to increase as the industry matures.

Colorado, Oregon, and Alaska legalized recreational cannabis use in 2014, and many more have begun decriminalization, and legalization for medical purposes.

In response, some states have toughened impaired driving laws and banned smoking in public areas, as we have seen in Canada, and Canadian camp grounds. The socio-economic effects of legalization have been difficult to gauge and statistical data shows mixed findings of course decedent upon who’s invested in each case study you’re reading.

There are signs that teen use has actually decreased while adult usage was higher than expected, especially in Washington. Correlations between teen alcohol and cannabis use have been suggested, but further research is needed to draw accurate conclusions.

Claims linking cannabis usage to homelessness in Colorado, but they do not take into account other economic and societal factors, especially the concurrent decline of the local oil industry. Homelessness rates have been shown to be consistent across states with legalized usage and those still prohibiting usage.

Many unanswered questions still await our research. With the industry and external industries benefiting, there will likely be many more years of data on the affect of legalization yet to come, and finally, the financing to fund the studies.

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