The Pros & Cons of Cannabis Legalisation


In the USA, we saw the simultaneous conflict between state and federal law, and the benefit of legalisation for different state economies. In the Netherlands and Spain, there was a half-hearted attitude towards legalisation. As for Uruguay? Full legalisation without proper preparation. Everybody did it a little differently — so is there a best way to do it?

It’s starting to feel as though the world has entered a post legalisation age, but have we? California became the first state to legalise medicinal cannabis in the USA in 1996, and since then, we have watched a dramatic upheaval of cannabis prohibition in the Western world. Although it feels like “everybody is legalising cannabis” at the moment, the only two countries in the whole world that have fully legalised cannabis are Canada and Uruguay.

States have taken matters of cannabis law reform into their own hands despite federal laws in the USA and Australia. Countries like Spain and the Netherlands are somewhere in the middle, tolerating only some aspects of cannabis sales and purchases. In comparison there exist countries like North Korea, India, Afghanistan, Morocco, and Lebanon where cannabis is illegal but still traded quite freely. Then there’s Portugal, which has decriminalised all drugs.

Are we yet to see a good model for cannabis legalisation in the post-legalisation era? Who did well and who didn’t? Out of all the different models of legalisation and decriminalisation, is there a holy grail? Wherever there are pros, there are always cons, so let’s have a look at both.

State & regional legalisation vs national legalisation

Since cannabis was first legalised in California in 1996, US states have been legalising cannabis despite being federally illegal. The disparity between state and federal law was arguably one of the first challenges we saw in the dismantling of a 100-year prohibition.

In 2015 and 2016, the American federal government raided multiple dispensaries and suppliers in California. The inconsistency between these two levels of law created a legal, shady grey area that left business owners and suppliers vulnerable to the hands of federal law.

Raiding wasn’t the only thing dispensary owners had to look forward to; there was the inevitably difficult banking dilemma. Banks, which are regulated federally, are not able to work with businesses selling a federally illegal substance. Most US banks don’t work with cannabis companies, which is a massive hindrance to both the federal economy, and state businesses that still can’t accept credit or debit cards for sales.

These are the kinds of challenges that we face in a system where the state and federal laws are inconsistent. Another good example of this is Freetown Christiania in Denmark. Though this isn’t a state, it’s a free territory right in the middle of Copenhagen that practically has its own rules. One of those rules is the freedom to use and sell cannabis.

The caveat is that you can’t take your cannabis anywhere outside of the seven hectares of Christiania. For tourists and locals alike, Christiania is a hub for cannabis where it can be freely used — and also where it can be easily sourced.

Christiania has been subject to what some call an existential crisis. Police raided it on numerous occasions. Many people were arrested for selling cannabis, and some for possessing it. Authorities remain intolerant to Christiania’s freedom as a territory, especially for its stance on drugs. And put quite simply, this isn’t a sustainable model for cannabis legalisation.

The outcome of the “tolerance” approach in Spain and the Netherlands

Spain and Netherlands face their challenges with an illegal, albeit tolerant approach to cannabis use. On the one hand, the tolerance approach is somewhat like decriminalisation in that the simple user is not penalised for an obviously not-dangerous act. However, Spain and the Netherlands also allow the sale of cannabis, despite the fact that it is illegal.

Coffeeshops and Cannabis Social Clubs face strict rules to be able to sell cannabis. Some of those rules are enforced more strictly than others. For example:

  • In the Netherlands, coffeeshops can only legally stock 500 grams of cannabis
  • Netherlands coffeeshops can’t sell more than 5 grams of cannabis to any given person on any given day
  • Netherlands coffeeshops aren’t meant to sell cannabis to foreigners, but this is not strictly enforced
  • To access cannabis from a Spanish Cannabis Social Club, you have to be a member of the social club
  • Only Spanish residents can be members of a Cannabis Social Club

In both Spain and the Netherlands, cannabis shouldn’t be consumed in a public place. It also can’t be purchased from anybody except a licensed coffeeshop or social club as that would constitute a criminal offence.

There are also complications for coffeeshops themselves purchasing cannabis for sale. To grow the very cannabis that coffeeshops sell, and in the amount they sell it, is illegal. There’s an element of absurdity here: the Dutch Tolerance Policy doesn’t cover cannabis cultivation, so all cannabis cultivation efforts are clandestine. In a sense, none of the cannabis activity that goes on in the Netherlands is legal — it’s simply tolerated under the Dutch Tolerance Policy.

In these models, the government doesn’t stand to benefit from cannabis legalisation. For example, the Dutch government can’t tax something that’s technically illegal, and therefore doesn’t allow the economy to benefit from what’s already a booming industry.

How legalising cannabis affected Uruguay

Uruguay was the first country in the world to fully legalise cannabis at a national level, making it both medically and recreationally legal. What Uruguay didn’t do was prepare for undoing something that was heavily ingrained into its legal framework.

Uruguay legalised cannabis in December 2013 but hadn’t yet given the Uruguayan people a legal avenue through which they could buy it. It wasn’t until the summer of 2017 that cannabis became available for sale in pharmacies across Uruguay.

The Uruguayan government didn’t adequately prepare for demand, with very few legal growers in the country. Until now, it’s common for pharmacies to sell out or for people to wait in long queues to purchase cannabis from the pharmacy.

Cannabis dispensaries and vendors in Uruguay face banking issues very similar to the USA, even though it’s a national scheme. Many businesses in Uruguay partner with US banks for international transactions, many of them were later prohibited from selling cannabis because of US-controlled substances laws. Because of this, there are very few pharmacies willing to stock and sell cannabis.

This is an issue because where supply doesn’t meet demand, customers are still driven to the illegal black market. The apparent purpose of reform is to force cannabis users into the legal market, but it seems Uruguay may have failed to do this because there isn’t enough cannabis available in the legal marketplace.

How legalisation affected Canada

Canada is by far the most organised country when it comes to cannabis legalisation. Before any law reform took place, an entire framework of laws and regulatory standards was introduced, giving the cannabis industry an already-existing set of protocols to work with.

The Cannabis Act created by Canada was comprehensive from the outset, obviously observing the mistakes made by other countries. For example, it was a major objective of the Cannabis Act to:

  1. Keep cannabis out of the hands of minors
  2. Keep money out of the hands of criminals
  3. Protect public health and safety by giving adults access to legal cannabis

This contrasts with the US model, which essentially sought to bring illegal cannabis producers out into the open. Instead, the Canadian model hands out licenses to producers, requires them to grow under strict conditions and subjects them to rigorous protocols for maintaining standards.

This has not been completely fulfilled, even a year into cannabis legalisation. The black market still exists for dubious reasons; for example, some people don’t want to put their full name and credit card details in a cannabis dispensary’s website. But so far, Canada shows the best, most comprehensive legal framework for bringing cannabis back onto the market.

Does cannabis legalisation increase use?

In the scientific sphere, there are conflicting opinions about the overall trends of cannabis use after legalisation. As we move deeper into the age of legalisation, there may also be delayed effects that are not observed in countries that have only recently legalised cannabis.

For example, in the USA, there’s no correlation between increased cannabis use in adolescents after legalisation in certain states. In Canada, where cannabis has been legalised for a much shorter time, there is still no association between legalisation and increased cannabis use. Equally, in Uruguay, there has been no significant increase in cannabis use among adolescents.

The only group in Canada where cannabis use seems to be on the rise is in adults over 25. However, this was only observed in the group using it occasionally. There has been no observation of daily use increasing among adults.

In a 2019 study, researchers found that cannabis use, frequent cannabis use, and cannabis use disorder increased overall in adults in legal states versus non-legal states in the USA. What we might be witnessing is delayed reactions to legalisation, where it takes a number of years to see the consequences of cannabis use.

It’s important to realise that this study does not analyse whether or not those who were using opiates or alcohol, for example, have switched to cannabis use, therefore increasing the rates of cannabis use.

How does cannabis legalisation affect the economy?

Economic growth and job creation were some of the major supporting arguments of cannabis legalisation as a whole. Knowing there were billions of dollars circulating an illegal market for cannabis, it could only be anticipated that legalisation would bring some of that money into the legal economy. Let’s see how different countries stacked up.

The Netherlands & Spain

Because of the Netherlands’ somewhat absurd cannabis laws, not even nearly enough cannabis money is funnelled into the economy. Because it’s technically illegal to grow cannabis on a commercial scale, coffeeshops buy their cannabis through the back door from clandestine growers. This means they don’t pay tax on the purchase, although the coffeeshops themselves pay income tax. This means there’s very little earning potential for the Dutch government.

In Spain, Cannabis Social Clubs can only operate as not-for-profit organisations, where the money generated by the club goes straight back into upkeep. The fact that Cannabis Social Clubs are required to be not-for-profit speaks for itself — there “shouldn’t” be any profit to hand back to the economy in the form of tax.

The cannabis economy in the USA

As in the USA, cannabis is still only federally decriminalised (not legal). This means that the federal economy doesn’t stand to gain much. However, state economies have bloomed thanks to the cannabis industry.

Since cannabis was legalised in Colorado in 2014, the state has surpassed $11 billion in total cannabis sales. Since January 2018, California has rolled in $1.2 billion in excise tax, almost $300 million in cultivation tax, and over $800 million in sales tax.

In 2020, Washington state collected a total of $883 million from the cannabis sector. Of this, $468 million was collected as state tax revenues resulting from direct cannabis retail sales. The remainder was collected through property and excise taxes, amongst others.

It’s forecasted that by 2025, US states will exceed $43 billion in total cannabis sales. In short, cannabis legalisation has been extremely beneficial for US states from an economic standpoint, and should the federal government move to legalise cannabis, some of this revenue can be distributed around the whole country.

Cannabis and the Canadian economy

Between April 2019 and March 2020, Canada’s cannabis excise duty totalled $23.7 million (CA$32 million). This really only represents a fraction of the total Canadian tax revenue for that period, but it begins to show growth in the sector in Canada. Cannabis has only been legal in Canada since the end of 2018, and so the industry is relatively new.

The figures do show that there is still a good chance for the country to reap the benefits of the cannabis industry, and further growth is expected.

How has cannabis legalisation affected crime?

One of the most critical supporting arguments for the legalisation movement was the reduction of crime. For the most part, that expectation has been met.

One 2017 study found that following legalisation, there was a reduction in violent crime in the states that border with Mexico. Reduction in crime was also demonstrated in Colorado and Washington.

Cannabis crimes still exist because the black market continues to exist. Still, there is a thread in the research that suggests that legalisation was enormously beneficial to reduce cannabis-related crime, and arrest.

Cannabis legalisation blew open the doors for research

Arguably, the most crucial thing cannabis legalisation has done is to open the door for proper cannabis research. This double-edged sword was once the reason countries were hesitant to legalise — there wasn’t much information about the plant. But without legalisation, it is nearly impossible to acquire cannabis to conduct clinical research.

Legalisation didn’t make it easier to conduct research. The same barriers and requirements are still in place. However, legalisation necessitated research. As cannabis became widely available to many different people, it became imperative for the medical sphere to understand the implications of using cannabis. It has also generated much interest in the application of certain diseases such as epilepsy, cancer, and Parkinson’s disease.

Interestingly, cannabis legalisation opened the door for the pharmaceutical industry to participate. And they have. Epidiolex and Sativex by GW Pharmaceuticals were the first cannabis products to be created and sold by the pharmaceutical industry.

Needless to say, the eagerness to participate also requires pharmaceutical companies to conduct research in order to gain approval from the necessary bodies. Legalisation opened the door for funding for research by incentivising the pharmaceutical industry to participate.

Until now, no country has attempted to provide amnesty

Canada is one of the few countries with a half-hearted attempt at an amnesty law, although it merely calls for free, expedited record suspension for those with a simple cannabis possession record. The bill would barely even begin to touch on the number of people still living in Canada with cannabis criminal records.

The USA has no such program in place, although it’s clear this is because at a federal level, things have only just begun to change.

The world lacks any effective system for restoring what was destroyed during the era of prohibition. There are millions of people in cannabis-legal countries still living with their cannabis criminal records, and in light of legalisation, amnesty is high on the agenda.

The lack of amnesty is arguably the most significant failing point of any cannabis reform around the world. At the same time, it poses the hardest logistical task of cannabis reform. Sifting through millions of criminal records and deciding which ones are appropriate for amnesty is a mammoth task that most governments have conveniently chosen to forget about.

Overall, cannabis legalisation has had a tremendous impact on the world in many ways. Not only has legalisation increased the accessibility of medicinal cannabis to those who can benefit, but it has also removed the need to acquire it in dangerous and illegal ways.

Countries and states have enjoyed the economic boost from the cannabis industry, while citizens have breathed a sigh of relief. Did anybody do it perfectly? Not quite. But as the legalisation journey continues, it’s imperative to continue to refine and perfect the law. Refining a cannabis law to protect young people, maintain high standards in cannabis cultivation and sale, and support further research is the only way to integrate cannabis in the post-legalisation era.

What are your views on the state of the world post-legalisation? Who do you think has the best model? Let us know your thoughts in the comments.

  • Disclaimer:

    While every effort has been made to ensure the accuracy of this article, it is not intended to provide legal advice, as individual situations will differ and should be discussed with an expert and/or lawyer.

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