The global marijuana industry is growing rapidly with Israel, Canada, The Netherlands, Uruguay and 22 states in the USA selling medical marijuana legally. However, within these countries, many restrictions still prevent the industry’s full economic, health and social benefits from reaching their potential.
The USA boasts the largest industry, said to be the biggest in the country by some. Expected to grow to $20b by 2020, like the Dutch, they have caught attention around the world and the 22 states where this has taken place demonstrate to other countries that full legalisation is extremely lucrative. That the black market in the US is valued at $41b shows however that much can still be done to grow a fully regulated and more profitable industry.
With several more states looking to legalise, federal legalisation could be on the cards for the fastest growing market in the world, which would mean a huge decrease in the need for drug law enforcement and would generate far greater tax revenues. Dutch marijuana tax revenues are significant, estimated at $400m a year, while similarly, Colorado State’s revenues alone are around $85m. By comparison, Uruguay, Canada and Israel, though also having reformed, and having seen substantial growth in each of these industries, have not reaped the financial benefits of full commercialisation and the increased tax revenue that comes with it.
“…since 2014 US firms have invested $50m, and which, according to researchers for iCAN, will grow to a value of $100m by 2020“
2013’s reform in Uruguay, Latin America’s ‘Vanguard of social reform‘ has gone three years without seeing significant industry growth. This is due to the slow emergence of the new closely anticipated reform (promised to the people upon legalization and awaited ever since) whereby commercialization will occur and regulated medical marijuana will be sold in pharmacies. Through legalising homegrown marijuana they have diminished trafficking of narcotics, drug-related crime, the sale of ‘harder’ drugs (primarily cocaine) and enhanced the safety of consumption in general, though by acting slowly in distribution the Uruguayan government hasn’t fully benefited from the legalisation; instead those who grow themselves and distribute have prospered.
“…the advantage [of Uruguay’s legalization policy] is that we can identify who is consuming. If we identify consumers, we can help them. If we criminalize them and keep them underground, we steer them towards drug dealers and wash our hands of responsibility.”
Though the industry in Uruguay could have been more effectively reformed to date, the government seeks this month to commercialise and sell in pharmacies- enabling every citizen legal access rather than solely the 6000 who grow or are in cannabis clubs (160,000 are estimated to buy marijuana from pharmacies when they can) foretelling a potential boom in the industry once the infrastructure is set in place.
Like Uruguay, the Canadian marijuana industry (before legalisation in 2001) used to run illegally, causing high potency, unregulated and potentially harmful street products to be distributed. Since the legalisation grow-shops have been able to sell more reliably sourced marijuana at affordable prices along with better-regulated by-products such as hashish.
This still technically occurs illegally, and though the government do almost nothing to convict those who break cannabis laws and seem content with continuation, it is easy to feel they have missed out somewhat. Canada’s current industry, estimated to reach a value of 1.1 Billion by 2020 without legalisation, is estimated to reach 2.5 billion should they begin to distribute and regulate themselves. This would theoretically put a stop to the ‘cannibalisation’ of profits into the black market similarly occurring in the US and make additional tax revenues available to local authorities.
The current reform has facilitated a degree of growth in the industry as it did in Uruguay, however, both countries would benefit from further reform. The current Marijuana for Medical Purposes Regulations (MMPR) in Canada, enacted on April 1, 2014, allows patients to possess dried bud and Cannabis Oil with a prescription, with over 30 approved dispensaries now in practise.
Israel, though having legalised medical consumption, faces similarly limiting technicalities in their cannabis law, though their research is extensive and innovating. A significant, albeit smaller $20m market, the Israeli reform was implemented for purely medical purposes, with recreational use still fully illegal. A permit is necessary for medical marijuana and is only given in the case of very serious ailments, thus a small number of some 2300 people in the country have one- however a considerable number of 25000 patients were treated last year for various serious conditions.
Unlike the USA, people in Israel are not likely to consider consuming marijuana for less serious conditions such as anxiety or migraines. However, this may be down to a lack of awareness in relation to the positive effects that cannabis can have on these conditions and it is possible that with some education the industry could grow much faster.
With this could come further growth to an already growing market, one in which since 2014 US firms have invested $50m, and which, according to researchers for iCAN, will grow to a value of $100m by 2020. The slow paced growth is attributable to Israel’s comprehensive research whereby distributors convene with scientific institutions to trial and develop specific strains that treat specific illnesses and disorders. In comparison to the $5.4b US market, the Israeli’s is small, despite distributing better regulated and better-classified marijuana.
References and further Reading
Matt Ferner (Jan 2015) “Legal Marijuana Is The Fastest-Growing Industry In The U.S.: Report”‘, Huffington post-http://www.huffingtonpost.com/2015/01/26/marijuana-industry-fastest-growing_n_6540166.html
Research and Markets (Sept 2015) “North American Cannabis Market Value to Grow Over $20.7 Billion by 2020 says, ‘North America Cannabis Market: Focus on Application, Derivative, and Region – Estimation & Forecast, 2015-2020”, PR Newswire- http://www.prnewswire.com/news-releases/north-american-cannabis-market-value-to-grow-over-207-billion-by-2020-says-north-america-cannabis-market-focus-on-application-derivative-and-region—estimation–forecast-2015-2020-300142307.html
(March 2015) “Mexico’s drug cartels adapt to US pot legalization,” Yahoo News/Havocscope-http://www.havocscope.com/tag/marijuana/
Steve Rolles (March 2014) “Cannabis policy in the Netherlands: moving forwards not backwards”, Transform-http://www.tdpf.org.uk/blog/cannabis-policy-netherlands-moving-forwards-not-backwards CHANGE HYPERLINK,,,,!,,,**
State of Colorado (Feb 2016) “Marijuana Taxes, Licenses, and Fees Transfers and Distribution”, Colorado.gov-https://www.colorado.gov/pacific/sites/default/files/1215%20Marijuana%20Tax%2C%20License%2C%20and%20Fees%20Report%20SPREADSHEET.xlsx
John Walsh & Geoff Ramsay (2016) “Uruguay’s Drug Policy: Major Innovations, Major Challenges”, Foreign Policy at Brookings- https://www.brookings.edu/wp-content/uploads/2016/07/Walsh-Uruguay-final.pdf
Laden Cher (March 2016) “Uruguay’s Half-Baked Marijuana Experiment”, Foreign Policy-http://foreignpolicy.com/2016/03/21/uruguay-marijuana-legalization/
Uki Goñi (March 2016) “Uruguay’s legal marijuana policy en route to next phase of regulation”, The Guardian-https://www.theguardian.com/world/2016/mar/24/uruguay-legal-marijuana-next-phase-regulation
Gérald Lafrenière & Leah Spicer (June 2002) “ILLICIT DRUG TRENDS IN CANADA 1980-2001: A REVIEW AND ANALYSIS OF ENFORCEMENT DATA”, Parliament of Canada- http://www.parl.gc.ca/Content/SEN/Committee/371/ille/library/DrugTrends-e.htm
Andre Uddin & Neal Gilmer (April 2016) “Growth opportunities in the Canadian marijuana market”, The Globe and Mail- http://www.theglobeandmail.com/globe-investor/investment-ideas/research-reports/growth-opportunities-abound-in-canadian-marijuana-market/article29573393/
Green Doctor Network (2014)- http://greendoctornetwork.com/is-marijuana-legal-in-canada/
(March 2016) “Medical Marijuana takes off in Israel”- Ynet News- http://www.ynetnews.com/articles/0,7340,L-4783899,00.html
April. M Short (Jan 2014) “How Israel Became A Medical Marijuana Powerhouse”, No Camels-http://nocamels.com/2014/01/how-israel-became-a-medical-marijuana-powerhouse/
Maayan Lubell (March 2016) “Israel Is Cornering The Medical Marijuana Market”, Forward- http://forward.com/news/337294/israel-is-cornering-the-medical-marijuana-market/