The True Costs of Cannabis
Well, I’m back on home turf in Victoria after a two-week fact-finding jaunt in New York, and I’m high with optimism (it can’t still be those brownies??).
Fun fact; Australia legalised cannabis for medical use nine months before the state of New York back in 2016.
New York then legalised cannabis for recreational adult use in March 2021, and I wanted to see what’s gone on in the four-years since.
My whirlwind tour of New York and its cannabis culture highlighted some unique opportunities; and it also raised some important issues.
I suppose this is a rare benefit of Australia’s painfully slow adoption of progressive cannabis law reform – we get to see what they do in every other country and learn from it.
A New York state adult cannabis use survey from 2021 found 12.6 percent of adults reported consuming cannabis in the past 30 days. That’s a mere bee’s dick difference from the 11 percent of Australians who also report using cannabis regularly. And it appears that overseas suppliers rather than domestic Australian cultivators have been the primary beneficiaries of local demand.
A report on cannabis regulations in Australia found that an estimated $2.1 billion is spent on law enforcement resources per year as part of the country’s ongoing war on the plant as part of its prohibitionist approach. From the large-scale efforts to seize weed that these taxpayer billions go towards, a measly 2.6 percent of the 441 tonnes of illegal cannabis Australia consumes annually is confiscated.
Yet economists estimate the size of the illicit retail cannabis market in Australia to be around $5 billion.
So, Australia spends $2.1 billion a year trying to stop 2.9 million Australian adults use cannabis that they are forced to buy from a criminal market worth around $5 billion.
Oh, and the return on investment?
Around $130 million worth of cannabis plants are seized annually.
Now I have no aspirations to be treasurer, but I’m happy to advise whomever does that this is a terrible investment.
New York’s approach to cannabis law reform is built on the premise of protecting public health and safety by providing legal access to safe, tested, and regulated products. It’s a sensible approach that shifts the focus from hard-line law enforcement to prioritising public health and safety, social justice, and equitable economic development designed to help undo the harm caused by cannabis prohibition.
The steps New York took to reach socially-conscious law reform were based on a 2018 assessment of the possible impact of regulating cannabis in New York State.
The report assessed the health, public safety, and economic impact of legalizing marijuana based on reviews carried out by New York State agencies. Here’s what they found:
The positive effects of regulating an adult marijuana market in New York State (NYS) outweigh the potential negative impacts. Harm reduction principles can and should be incorporated into a regulated marijuana program to help ensure consumer and industry safety. Legalising marijuana could remove research restrictions in NYS, which will enable the State to add to the knowledge of both the benefits and risks. In addition, NYS would be one of the largest regulated marijuana markets. As such, there is potential for substantial tax revenue in NYS, which can be used to help support program initiatives in areas such as public health, education, transportation, research, law enforcement and workforce development. Tax revenues can also support community reinvestment in health care and employment. Finally, legalisation of marijuana will address an important social justice issue by reducing disproportionate criminalisation and incarceration of minority communities.
The cannabis market in New York, which has a similar population to Australia, is estimated to be around US$7 Billion per year.
New York has taken significant steps to use cannabis law reform to make positive social changes, which has led to some fantastic initiatives around housing, employment, and criminal justice. And while their model isn’t perfect, it’s far better than the prohibitionist approach that wastes taxpayer money, enriches criminals, and disproportionately targets the more vulnerable members of communities.
And in Australia?
Well, according to the most recent national data produced by the Australian Criminal Intelligence Commission, cannabis accounted for nearly half (47.1 percent) of the 140,624 drug-related arrests across Australia in 2020-21, with 90 percent of national cannabis arrests affecting cannabis consumers, rather than suppliers. In Victoria, similarly, use and possession charges accounted for 84.5 percent of the 8,942 cannabis-related drug offences recorded in the year through June 2024.
A 2023 study by the Australian Institute of Criminology found that of nearly 600 Australian organised crime groups involved in drug trafficking, 21.6 percent of the sample participated in the criminal cannabis market, with cannabis ranking behind only methamphetamine and cocaine among the drugs most trafficked by serious and organised crime.
Yet the primary output of law enforcement spending continues to be arrests for low-level use and possession offences.
These arrests are pointless and harmful, and the intent is ineffective. People convicted for consumer cannabis offences encounter consequences that are grossly disproportionate to the offence committed.
According to a report funded by the National Drug Law Enforcement Research Fund, an initiative of the National Drug Strategy, the average cost of arrest for a cannabis offence has been estimated to be more than $1,900. Surely we can see by now that not only does prohibition not work, it’s an embarrassingly woeful waste of taxpayer money.
As summarised beautifully by the Pennington Institute, ‘the current model represents a cumulative outlay of tens of millions of dollars in law enforcement and court costs and the imposition of significant repercussions on the thousands of people designated as offenders – all in service of enforcing laws that a majority of Victorians prefer to see eliminated and replaced with a regulated cannabis market’.