The dawn of a changing political landscape when it comes to criminal justice and drug reform is on the horizon in Canada as the Trudeau government plans to legalize recreational marijuana this summer. Coming after months of study, debate and referendum, Parliament has finally come to terms with reality: the “war on drugs,” as it is colloquially referred in the United States, is ineffective and a financial black hole to the nation. Canada spends nearly half a billion dollars annually enforcing drug policies that have, frankly, failed. It is important to note that, generally speaking, both supporters and opponents to the legalization of marijuana agree that enforcement policies thus far have been fruitless and harmful — the matter of contention …show more content…
Marijuana prohibition has left the cannabis market unregulated and allows for dealers to inflate the price, charging a risk premium, due to the illegal nature of the good. Furthermore, that the sale of marijuana is illegal is a barrier to entry — economic principles tell us barriers to entry give way to monopolistic markets. Simply put, because of the risk dealers take in selling illicit goods and the fact there is little competition (due to high barriers to entry) they can charge high prices and thus reap sizable profits. By allowing for the legal sale of marijuana, the government can siphon profits from sellers and pocket it as tax revenue — assuming that an effective tax system is implemented. This is an important detail as if prices fall, extra tax revenues would not be realized, defeating a core purpose for legalizing cannabis. On top of increased tax revenues, the government would save considerably on enforcement costs. Marijuana contributes about six billion dollars a year to Canada's economy — taking advantage of a new source of revenue is critical given that the projected budget deficit for 2018-19 will be over eighteen billion