Cannabis in Canada: Will cannabis help Canada overtake the USA?
There were queues all over Canada on Wednesday as people stood in line to be the first to buy non-medical cannabis legally. This represented a big step forward for Canada as it became the second country in the world, after Uruguay, to legalize the possession and use of cannabis. Whilst medicinal marijuana has been legal since 2001, the recent legalization is the outcome of a promise the Canadian Prime Minister Justin Trudeau made in his 2015 campaign for office.
The benefits of legalizing cannabis
It’s thought that legalising cannabis will reduce the burden of cannabis laws on the legal system and reduce the illegal drug market, making it harder for minors to get hold of the drug. Crime rates in general could also improve – since Uruguay legalised cannabis in 2017, crime has plummeted by a massive 20%. And by taking the profits from cannabis trade away from criminal dealers and into the hands of licensed distributors, the Canadian Government expects to raise an additional $400 million in taxes every year.
What does the USA think?
There are concerns that Canada’s new approach to cannabis control could further damage its fractious relationship with Donald Trump‘s administration in the USA. Campaigns have been launched in the USA, including a full page advertisement in The Times, to warn the US president that a failure to follow suit by legalising cannabis and allowing producers to gain funding from banking and institutional financing could lose the country its competitive advantage over Canada.
Many people in the USA are keen to keep pace with legalization to avoid giving away control over what may be the world‘s next major industry. There’s also feeling that by rejecting legalisation, the government is missing out on a big opportunity to open up more jobs for American citizens.
As the first major country to legalize cannabis, it would be huge for the Canadian economy if other countries start to follow its example. And with Canadian banks and shareholders willing to invest in cannabis production, the USA is missing out on huge investment opportunities.
Concerns from the USA cannabis industry
There are concerns from USA cannabis producers, including Derek Peterson, CEO of Californian-based cannabis producer and seller Terra Tech, who believe that this could start to create a problem for the existing American weed industry. The cannabis market in the USA is currently worth $47 billion, but producers worry that they will start to lose out to the Canadian market which has greater scope for growth now that it has been legalized and has financial backing in place.
Those growing cannabis for medical reasons may see themselves being undercut by Canadian companies. Canadian production would also have the opportunity to make the most of establishing brands and investing early on, which could be difficult to overcome if the USA decided to follow suit at a later stage.
According to Derek Peterson, the USA needs to adopt a similar law quickly if they don’t want Canada to take over the industry. He had this to say,
The future of the cannabis industry
The future of the legal cannabis industry is not yet clear, but with countries like Portugal and Holland already decriminalizing it and the citizens of other countries calling for a referendum, it could well be the world’s next major industry.
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