Regulated Cannabis Revenue Potential

For years it has been suggested by individuals such as Luke ‘Ming’ Flanagan that cannabis legalisation could potentially be worth hundreds of millions of euros to the Irish economy each year.

‘Ming’ ahead of his Cannabis Regulation Bill in 2013 claimed cannabis could save the economy €300 million each year

This claim was recently backed up by the UCD Professor of Economics Ronald Davies. Speaking at the Think Big event last year the economist suggested that cannabis legalisation could be worth around €560 million a year. 

This figure according to Professor Davies can be considered a conservative estimate, so it is likely the actual benefit would be more than half a billion each year.

 

Across the globe black market activities made up of drug dealing and prostitution are starting to appear in reports relating to a countries GDP, in order to gauge their worth.

In 2013 prostitution and drugs accounted for around €1.2 billion to Ireland’s economic activity according to the CSO. However the methodology for achieving this has not been revealed, so its accuracy maybe questionable, but it offers a rough figure.

But this figure does seem to back up both Luke’s and Professor Davies’s claims of a regulated industry being worth hundreds of millions to the economy each year.

Of course there are unforeseen costs and consequences with every action, no less so when it involves changes to tax regimes.

So while there maybe this potential income of €500m, without a thorough full costs benefit analysis, and without seeing the process in action, it is hard to gauge what other taxes maybe affected.

For example if suddenly we saw a drop in the sale of cigarettes and alcohol due to cannabis sales, then one would have to take into account the revenue lost from these products. Both of these products are long considered the old reliables by Finance ministers due to their income raising.

On the Irish Cannabis News page and on the comment sections of various news sites, one can often find an individual claiming cannabis legalisation would end the recession/austerity.

Sadly such claims go up in smoke when looking at the figures involved. The current gap between income and expenditure in the state is around six billion and this is after years of dramatic cuts.

However all things being equal, and if we accept the claims suggesting cannabis legalisation is worth €500 million, then while it wouldn’t close the gap fully, it would dent it at least.

Regardless, half a billion euro is not something to scoff at. While the money raised would not end the economic crisis, it would offer some relief, especially if the money was invested in the correct areas.

Colarado which enjoyed its first year of legalisation in 2014 has seen its coffers boosted.

The data shows that in 2014 from both recreational and medicinal sales, plus business fees, Colorado brought in around $70 million in revenue. This is from sales worth over $700 million. Another benefit was the almost 10,000 jobs which were created in Colorado thanks to this new industry.

The $70 million figure doesn’t appear to take into account the other offshoots of tax intake that would arise from people spending in other industries. Such as people purchasing gardening supplies, tourist revenue to hotels and local businesses, the spending power of 10,000 new workers, and so on.

Once the data has emerged and been analysed then the next few years will offer full insight into how a legal cannabis industry has changed Colorado’s economy. I expect many will be pleasantly surprised of its value.

We also have other states aside from Colorado which will also be revealing interesting data over the coming years.

If you are interested in finding out how many tons of cannabis was sold, the amount of edibles sold and other tidbits, then there is a trove of data relating to Colorado here

As stated earlier €500 million is a significant amount of money. In the Irish context half a billion euro could go a long way.

In 2014 the state’s health budget overran by around half a billion. As we have seen with the crisis ongoing in emergency departments and elsewhere, the health service is arguably underfunded, or grossly mismanaged, if not both.

Ring-fencing monies raised from cannabis for areas like schooling, health and education, as proposed by Colorado, would not only be likely welcomed by all, but also be beneficial to improving these areas.

However there is an obvious elephant in the room, in terms of cash crops, and that is the hemp plant.

Arguably this is another industry with the potential to add billions to the coffers over the coming years. The many wide uses for the plant means there are countless industries that could grow or be created with a thriving hemp industry.

A hemp industry arguably has expediential potential for growth, meaning once it was thriving with factories, suppliers, distributors and consumers it could be worth as much as a cannabis industry, if not more.

While a thriving legal cannabis industry maybe a few years off yet, arguably we can begin moves to create a thriving hemp industry much sooner.

Hemp is already legal to grow here, and it is sown on Irish soil. However the lack of processing factories, and other factors, plus little political enthusiasm for a hemp industry means it is a miuch neglected and undervalued industry.

It seems incredible that we  have the potential to perhaps add a billion to our coffers each year with cannabis and hemp. Yet perhaps even more incredible there is little political or public outcry (outside of activists and some farmers) for a hemp industry.

Of course since we are now gearing up for general elections here, perhaps we can get these cash crops on the agenda.

Cannabis and hemp arguably offer us a unique opportunity to grow Ireland’s economy. However the benefits are not just economic but perhaps such moves would be healthy beneficial, environmentally beneficially and much more.

The revenue raising argument for regulating and developing a cannabis or hemp industry shouldn’t be the central, or sole one. However for some individuals realisation of the economic benefits maybe one way for them to reconsider their views.

Money talks, sadly. So it maybe time for activists to pull at the purse strings, and not the heartstrings.

The Darker Side To Some Irish Growhouses

Almost daily there are news reports of cannabis grows being uncovered. In the main they appear to be small scale operations that are often little more than a personal grow.

Other times they will be larger and are intended for some profit, but still may only involve a person or two.

However every once and a while (although more regularly these days) a massive growing operation is uncovered. These often tend to be for large scale production and purely for profit.

In recent years it has become more common to learn that an Asian criminal gang and/or Asian growers are involved with these operations.

This is not to suggest that growers of other nationalities, including Irish, are not producing on a large scale. However these grows don’t tend to involve the alleged use of human trafficking, forced labour and other questionable actions which have emerged in recent years.

As the market has switched from one reliant solely on cannabis imports to one featuring more domestic production, we have seen the rise of criminal gangs involved with cannabis cultivation.

It has long been suggested that Ireland was/is a hub for drugs entering into Europe, now perhaps some gangs see it as prime location for the mass production of cannabis.

As the CSO crime figures show cultivation in Ireland has increased rapidly in the past decade. From less than 50 offences in 2004, to almost 400 offences in 2013

Many see large scale cannabis production in Ireland as a relatively harmless pursuit, yet the research shows that is not always the case. Trafficking, forced labour, threats against life, assaults, damage to property and other dark elements exist.

Last week it emerged that a 54-year-old Vietnamese woman allegedly found locked inside a grow-house has brought a legal challenge to a refusal to declare she is the victim of trafficking

Also last week Grainne O’Toole of the Migrants Right Centre stated that people were being trafficked into Ireland to produce cannabis. The organisation claims to have identified 22 cases and at least 70 people, predominately Asian, who are imprisoned and that were potentially victims of trafficking

This is not the first time that the Migrants Right Centre has expressed concerns. Last year it issued a report which looked into trafficking victims who are ending up in Irish prisons 

The report showed that over 75% of people sent to jail for cannabis production were not of Irish origin. It revealed that more people of Asian origin get sent to prison for cannabis growing than Irish people

The Irish Examiner as part of their investigations into cannabis last year also reported on forced labour in the cannabis trade. It suggested that in the trade some gardeners are little more than ‘slaves’

Another often forgotten aspect of large scale cannabis cultivation was highlighted by the Irish Examiner’s investigation. This relates to a number of landlords who have seen their properties damaged by individuals involved with large scale production of cannabis

How much of the cannabis in circulation that comes from grows using forced labour is hard to tell. Many consumers are unaware of the origins of their cannabis, some even unconcerned. Others however do make an effort to either supply themselves, or know the grower of their cannabis.

Arguably there are two factors which are key: consumers and the law.

Cannabis use is historic and unlikely to stop anytime soon, despite the perhaps ill founded wishes of prohibitionists. So arguably consumers need to make an effort to insure they are not supporting such criminal gangs.

Many will argue the onus is on the state to take a significant part of the trade from out of criminal hands and into the open. A regulated market would largely remove the need and desire for criminal gangs to exploit people in such a way.

The law largely determines if the state or criminals benefit from cannabis growing and its use. The trade is very lucrative and thus these sinister elements are unlikely to disappear by their own accord. If anything we may see more tragic cases emerge.

For now all we can do is encourage consumers to do their best to ensure their cannabis doesn’t come from such suppliers. While the community as a whole must also push for law reform, so that such exploitation doesn’t continue.

As stated earlier the majority of these problems are due to criminal gangs and even perhaps prohibition itself.

There are many growers who go about their lives peacefully. Neither I, nor anyody reading, should come to the conclusion that growers are bad people. On the whole cannabis grows here are uneventful and go unnoticed.

But one must acknowledge these dark elements that exist, and arguably we must do our best to tackle them.

It is in all our interests (both enthusiasts and prohibitionists) that this darker side to grow houses is removed. Of course both sides might have different views about how we might achieve this, but I can only see only one reliable plan.

I suggest it is time we ended prohibition, as the consequences highlighted in this post are just further proof of the damage it is doing.

However one suspects only a few of the readers imagines this will happen anytime soon.

50 Years Of Drug Arrests In Ireland

The Irish state is 92 years old and since its foundation a policy of drug prohibition has been enforced.

However it would be over 40 years before the first drug offense arrest occurred in 1964, and later in that year the first appearances in court for drugs

Raifiu Ojikuto, a 26-year-old Nigerian medical student was arrested in April 1964 for possession of Purple Hearts (amphetamine stimulant tablets) becoming the first person in state history to be arrested on drugs charges.

However he was found dead having failed to appear in court, but his death was not treated as suspicious.

In September of the same year a Scottish male named Stewart and a local man named Colin were the first to appear in court for drugs charges.

Stewart was sentenced to six months’ imprisonment for importing 20 packets of Indian hemp and supplying five packets to persons unknown in O’Connell Street.

Colm was sentenced to six months’ imprisonment on charges of being in possession of two packets of Indian hemp.

These arrests would be the first of many in the state, although the first few years were relatively quiet, with just two arrests in 1965, one in 1966, and no arrests in 1967.

The quietness of the previous years was gone in 1968, as there were 24 people charged with drugs offences. By 1969, this number had risen to 59 and then to 71 people by 1970.

The sharp rise might be linked to the establishment of the Garda Dublin Drugs Squad in 1967.

In comparison if we look at the CSO crime figures we see in 2004 a total of 9,866 controlled drug offences, and this number rose each year until peaking at 23,404 in 2008.

Since then there has been a year on year decline, and the total number of controlled drug offences in 2014 was 15,384.

Between 2004 and 2013 there was a total of 170,878 recorded drug offences.

It should be noted that while the recent Garda scandal may throw some doubt over the CSO numbers, these figures give us an idea of the number of drug arrests that occur each year.

Another anniversary happening this year is the 30 years that have passed since the 1984 Misuse of Drugs Act was enacted. While it has been supplemented with pieces of legislation over the years, it is largely the framework for drug policy in this country.

Ireland like the rest of the world is a much different place than it was in 1984. Certainly in the Irish context we were what might be considered socially conservative in 1984, and arguably there has been significant liberalisation of views and laws since then.

Since 1984 many countries have adopted varying policies based on forms of decriminalisation and with an emphasis on harm reduction.

One of the reasons for this change generally involves an acceptance that drug prohibition has failed, and awareness of this failure has spread in the past few years.

After 50 years of trying to use jail as a deterrent, and using 30 year old legislation as a basis, surely it is time an Irish government looked at a different approach.

Perhaps the next government will address drug policy by changing the framework and the ideas it is based on. However I’ll let you chose the appropriate words for the likelihood of this happening.

Although looking at the latest opinion polls, we could have a government made up of new and surprising elements in the next few years. This could see us with a government more open to a change in policy.

Arguably it is up to the activists here to force this change, to both change opinion on the ground and ultimately in the Dail and Seanad chambers.

Luckily this effort seems well underway.

Do you agree or disagree? Feel free to leave a comment below

You can see more about the timeline of issues relating to drug policy in Ireland here