While most wealthy economies are still stagnant, in decline or disrepair, the Canadian economy has outpaced all comers and will avoid the possibility of a double-dip recession that continues to haunt the US. But beyond the chorus of self-congratulatory backslapping coming from Ottawa, there has emerged a new and immediate threat of economic crisis that is being willfully ignored by Canadian politicians.

This November, in an effort to increase tax revenue, California will hold a referendum on whether or not to legalize the cultivation and use of marijuana. If passed, the change in law would be devastating to the Canadian economy, halting the flow of billions of dollars from the US into Canada and eventually forcing hundreds of thousands into unemployment.

Over the past 20 years, Canada has developed a substantial and highly profitable marijuana industry that is almost completely dependent on the US market. Between 60 and 90% of the marijuana produced domestically is exported to the US via cross-border smuggling operations. It’s exactly like the alcohol prohibition of the 1920s, only far more sophisticated and more profitable. The establishment of a legal industry based in the US would likely cripple these exports overnight.

  1. Micromike says:

    I call BS on this, it is nonsense. All 50 states consume marijuana and California won’t be the sole provider.

  2. bobbo, are we Men of Science, or Devo? says:

    Is economic success or failure that finely balanced in Canada? I doubt it. I thought Candadas success was mostly due to its strong(er) bank regulations that got it past our major recession. Legalization of drugs/taxation of it is not a cure all/end of it all. On balance though, USA legislators probably more in favor of drug policy changes than having effective bank regulations.

    More drug stupidity being touted as analysis.

  3. ECA says:

    IF’ you legalize it..
    it will be regulated and processed by the STATE..
    I dont think there is ANYTHING about growing it yourself.

  4. Special Ed says:

    This graphic shows the areas of the U.S. were marijuana is readily available:

  5. Conservative now says:

    My my my. Where was all of this when I was young and smoked pot? Thirty five years too late. Now, I detest the stuff.

  6. dtarasko says:

    I can do nothing but laugh at this craziness! Billions of dollars and hundreds of thousands of people unemployed? Are growers actually counted as employed here in Canada? And how would you go from growing pot to employment insurance? How would a grower even qualify?

    I’m starting to believe that Canada is the most misunderstood nation on this planet.

  7. chuck says:

    I guess we’ll just have to fall back to selling you all our oil, at slightly elevated prices.

  8. chris says:

    I do agree this exactly the same as alcohol prohibition, but don’t buy the conclusion Canadian operations would go hurting. Seagrams built a worldwide business based on revenues earned during alcohol prohibition. When it goes legal BC will still be seen as a capable producer.

  9. ECA says:

    100 YEAR CONTRACTS deny that claim.

  10. Mike in Newark CA says:

    Nothing will change in California after the Nov. election even if proposition 19 passes. Why? Because it will still be a Federal offense to grow and sell marijuana.

    This means that the State of California will receive no significant tax revenues from the sale or distribution of marijuana because any one who pays state income taxes for selling it can be arrested and sent to jail under the federal statues (and the sellers signature on the tax form will be the incriminating “confession”). This of course sets up an interesting Catch-22 for marijuana growers/sellers in California who may not need to worry about going to jail under state law for drug dealing, but may need to worry about going to jail for tax evasion unless they pay their taxes for their sales at which point they then have to worry that their “public record” tax forms can be used to convict them under federal statues for drug dealing.

    Common sense should tell us that as long as the Federal statutes make growing, distributing and selling marijuana for non-medicinal purposes (and this exception could change the next time the presidency changes) illegal, not much is going to change regarding its availability in California.

  11. Animby says:

    By this reasoning – we could legalize heroin and put the Taliban out of business! Or, as Adam Curry’s pot addled brain would have it, we would put the CIA out of business…

  12. god says:

    So, one dipshit blogger and “consultant” from the Left Coast of Canada avails himself of the Guardian’s “Village Voice” page – and you lot take him and his premises seriously.

    Go back to gaming.

  13. Greg Allen says:

    If marijuana advocates want to be taken seriously, they need to stop making ridiculous claims.

    One such claim I’ve heard so many times is, “legalizing marijuana won’t make usage go up.”

    This is absurd. Canada has the highest rate of usage in the industrialized world. Why? Because it’s legal (technically, decrimminalized.)

    Prohibition has a cost. Increased use has a cost too.

    I think you can make a pretty-good argument that the costs of increased use of marijuana will be lower than prohibition. I’d like to see some data-based estimates of how much it will go up since it’s a hard thing to guess.

    But don’t insult our intelligence by claiming that usage won’t go up if legalized.

  14. chuck says:

    #13 – actually, it’s not legal and it’s not been decriminalized.

    But… while police continue to raid grow-ops, and arrest dealers, they generally ignore users.

  15. dg says:

    What are these people smoking????

  16. chris says:


    You can’t supply a rhetorical opponent’s argument and then demand they disprove it.

    I would say that it is a certainty, 100%, that underage use would go down over time. Drug dealers don’t card people, but legal distribution outlets tend to. Especially in this case where the spotlight would be extra intense.

    The onus is now on opponents of decriminalization to demonstrate that pot should be considered more harmful than accepted substances like alcohol.

    A lot of the thrust for criminalization came from tales of out of control Mexicans causing trouble in the southwest.

    Now we have a situation where Mexico is a barely functioning state and illegal drug revenues are unarguably fueling that destructive spiral.

    If kids are less likely to get it, and everyone else can make their own decision who cares how many more people use?

  17. ECA says:


    1. i’ made retro active for the past 10 years, 40+% of minor drug charges can be droped from those in prison.
    At $40k per year PER PERSON, at least 100,000 arrested can be released. THAT is a savings of 4,000,000,000 per year.
    2. IF’ 10% more people Start using MJ?? and the tax is $2-3 per Smoke?? and you have 20% of Cali SMOKING…about 200,000 people, $400,000 per day in taxes for 1 million populace. $400,000×365 days..146,000,000 per year TAX/..

    There is a problem. releasing prisoners when we have UNEMPLOYMENT?? adds to it. OR the state can gather BUNCHES up and have them WORK on the farm.
    If the STATe has to HIRE the UNEMPLOYED, they need to raise the tax on CORPS to pay for the workers. do the roads, parks, EVERYTHING..

  18. chris says:


    If I understand you right you are arguing for mass incarceration so as not to add potential workers to the pool of people seeking employment. That’s pretty scary, especially considering how much incarceration costs.

    Say 30k per person/year of incarceration. That sounds like a cost that I’ve heard before. Take pot-related-prisoners * reasonable-sounding-incarceration-cost. That would seem to be a lot of money.

    If the government didn’t have to collect that money as taxes wouldn’t the savings generate a stimulative benefit similar to a tax cut? (I’m unconvinced that tax cuts at our top marginal rates are effective, but for the sake of argument).

    Hell, you could pay them 15k per year to build/repair roads, tax that income, and increase public goods.

  19. ECA says:

    WOW, you get my point.

    It is illegal to WORK prisoners. BUT if they ARNT prisoners, you can HIRE them..

    But understand it will raise the Unemployed rate a couple percentage points in Cali, EVEn if you get MOST to work.

    But, the law would have to be made RETRO happen BEFORE NOW, to have those prisoners released.
    For those that WANT TO WORK..
    setup MOVING camps, and keep them away from the cities, unless needed. FEED THEM, HOUSE them, PAY THEM..drug them out with MJ..

  20. chris says:

    #20 If the prisoners were released and, they or someone else, hired for less than the cost of their incarceration I don’t think that would change the unemployment rate. It would decrease California’s expenditures.

    I can’t actually believe we are having this conversation, but odd times make odd thoughts.

    I don’t know if this would be retroactive… still being crimes when committed. Maybe an amnesty?

  21. Airsick says:

    No, they do not send 60% or more of the marijuana grown here into the U.S. They smoke it here,
    These are lies and I daresay even slander of Canada! Our economy is not doing well because of illegal drug trafficking. What a pant load!

  22. Mike 71 says:

    Will legalisation of pot in California cause the bottom of the market to drop out in B.C.? Not likely, as what is grown and sold in B.C., is likely to be bought and smoked in B.C., or other parts of Canada! With American paranoia in the wake of the 9/11 attacks being what it is, it will be extremely difficult to smuggle anything south of the 49th parallel, and while most Americans would rather stay home and consume local product, once legalised, a relative few will go north in search of the much touted B.C. Bud!

  23. Sai Kai Lee says:

    Buying Californian weed over BC bud is like preferring a Yugo to a BMW.

    ’nuff said.


  24. Glenn E. says:

    I’m sure what it REALLY come down to, is that both the US Tobacco and Alcohol industries fear the competition of anything that would provide a “buzz”, they’re not able to profit from selling. One day, some genius will figure out how to grow MJ in a test tube. And that’ll be the end of looking for pot plants, in fields and hot basements. It’ll be as easy as brewing homemade beer. Maybe easier. So they might as well relax the law a little, to forestall that. And just limit the amount of MJ, anyone is allowed to produce and sell. Like they do with spirits.

    Besides. I have an idea that when something becomes no longer illegal to do. It will lose its appeal to do it. And more will quit, than will start.

  25. Jose says:

    The receptors from the brain this allow customer base of cannabinoids (like THC) are instead section of the most universal receptor system in the childs body. Not only is definitely the body the natural way attuned to help you these substances, it even uses the criminals to great effect — a variety of studies established that cannabinoids help reduce pain along with distressing signs and symptoms.


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