The business of drugs: Make it legal

By: Stephen Chartrand

Around the time that 1968 was being marked as a year of protest and social upheaval, of the cultural embrace of New Left politics and radical opposition to aggressive capitalism and authoritarianism, another opposition movement was gaining ground and political legitimacy; not in the counterculture movements of that seminal year but in Washington and the Oval Office. While the 68ers, intellectuals and musicians largely embraced the ‘drug culture,’ a few relics of that era provide us a flavour of the political sentiments that were developing in Washington.

Some of you will recall that great American road movie Easy Rider from 1969.  A hugely popular film when it was released, the movie stars Peter Fonda and Dennis Hopper as they traverse the American South and Southwest on their motorcycles, chronicling the 1960s drug culture and its fading hippie movements. In its opening scenes, as Wyatt (Fonda) and Billy (Hopper) are unloading smuggled cocaine with “Connection” (Phil Spector), accompanying the exchange is Steppenwolf’s’ “The Pusher”: “Well, now if I were the president of this land, you know, I’d declare total war on the pusher man. I’d cut him if he stands, and I’d shoot him if he’d run. Yes, I’d kill him with my Bible and my razor and my gun. God damn, the pusher.”

A couple years after Easy Rider, President Richard Nixon declared a war on drugs: “We must now candidly recognize that the deliberate procedures embodied in present efforts to control drug abuse are not sufficient in themselves. The problem has assumed the dimensions of a national emergency.”

Delivered to Congress on June 17, 1971, Nixon’s Special Message on Drug Abuse Prevention and Control marked the opening of the “War on Drugs,” a policy that every administration since Nixon has devoted itself to waging and expanding.

A policy that everyone knows has abjectly failed to destroy a $400 billion global industry, is fuelling a civil war in Mexico and responsible for a police and prison system that unnecessarily incarcerates thousands of people per year. Even though the Office of National Drug Control Policy stated on May 13, 2009 that the Obama administration would no longer use the term “War on Drugs,” – considering it divisive and “counter-productive” – Gil Kerlikowske, its current director, reassured that the United States government would not change nor alter its fundamental attitude towards recreational drug use.

According to Dr. Evan Wood of the University of British Columbia, the U.S. commitment to this policy since 1971 has cost the U.S. over a trillion dollars just in North America alone. The yearly global cost of drug law enforcement, according to the Transform Drug Policy Foundation, is estimated to exceed $100 billion per year.

While politicians in the United States, Canada, Thailand and elsewhere remain committed to the War on Drugs, there are encouraging signs the policy is beginning to unravel. In countries like Portugal or the Czech Republic and states like Washington, Pennsylvania and Colorado, the sheer economic realities of drug use are forcing politicians to reexamine their commitment to the failed War on Drugs.

In a study published in 2008 by Harvard economist Jeffrey A. Miron, he concluded that the legalization of drugs would “save [the U.S.] roughly $41.3 billion per year in government expenditures” on drug law enforcement; with state and local governments accruing $25.7 billion and the federal government $15.6 billion of those savings. Miron further estimated that drug legalization “would yield tax revenue of $46.7 billion annually … [if] legal drugs were taxed at rates comparable to those on alcohol and tobacco.”

In the most recent development, on January 1, 2014, Colorado became the first U.S. state to allow the regulated sale of recreational marijuana. Tom Angell, chairman of Marijuana Majority, said “we’re finally getting a chance to show the world the benefits of legalizing and regulating marijuana … bringing the market above ground will generate tax revenue, create jobs and take money out of the hands of the violent drug cartels and gangs that control the trade where marijuana is illegal.”

According to the Marijuana Enforcement Division (MED), the agency which will regulate the public sale of marijuana, more than 300 businesses have already received a state and local licence to sell the drug. Along with the 25 per cent tax approved by Amendment 64, recreational marijuana sales are “expected to generate roughly $70 million in additional revenue for the state in 2014.”  This figure, however, does not include the savings the state will accrue. Prior to Amendment 64, approximately 10,000 people each year in Colorado were arrested for being in possession of marijuana.

Similar efforts in Pennsylvania, lead by Senator Daylin Leach, who introduced Senate Bill 528 to have marijuana legalized,  has estimated that the state would save approximately $350 million per year “in the direct cost of prosecuting marijuana offenses,” while additional tax revenues Pennsylvania would accrue range between $200 million and $500 million per year.

The mood in Colorado, however, is still one of caution. Will legalization of marijuana suddenly delegitimize and economically neuter the black market?

“We’re cautiously optimistic,” said Julie Postlethwait, spokesperson for the MED. “Retail, recreational marijuana is basically a black-market industry, so there’s a lot of things that we will learn in the next couple years.” While the experience of Portugal has been controversial since the country made recreational drug use legal in 2001, it is perhaps too soon to tell how this gradual turn from a failed 40-year policy will exactly impact the countries and states making these changes.

In Canada, the policy of our government is still grounded in the War on Drugs mentality. In 2012, the Harper Conservative government renewed its five-year National Anti-Drug Strategy for another five years, which overall will cost taxpayers $528 million to fund further outdated drug enforcement initiatives.

The cost of this policy for Canadians is obviously much greater. According to the Canadian Centre on Substance Abuse, drug addiction has cost “our health care system $8 billion” while the Canadian Drug Policy Coalition estimates that just in B.C. alone lies an untaxed underground trade worth $357 million per year.

After forty years of the Nixonian approach to drugs, countries like Canada need to accept the War on Drugs has failed. States like Colorado have proven this.

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