Cannabis legalisation could see use rise but potency fall

It is likely that overall cannabis consumption would rise ‘significantly’ if the drug were legalised and prices dropped as a result, according to a study of the economic impact of legalisation by the Institute for Social and Economic Research. Average potency could fall, however, with ‘aggregate consumption of the psychoactive ingredient THC rising much less than consumption of the good itself, and possibly even declining’, says Licensing and regulation of the cannabis market in England and Wales: towards a cost-benefit analysis. 

‘All unambiguous claims for or against radical policy options should be treated with caution,’ say the report’s authors, given the levels of uncertainty around important issues relating to the introduction of a regulated market. These include a lack of understanding of why rates of use had declined over the last decade and the ‘degree to which the association between cannabis use and long-term adverse outcomes is truly causal’. Much of the ‘heated public debate’ on cannabis policy is far too limited in scope, it concludes, with few of the ‘the most vocal participants in the debate on drug policy reform’ taking a ‘sufficiently broad perspective’.

Product regulation similar to that for tobacco would have some advantages, the document states, although policy makers would need to bear in mind the consequences of different potential forms of regulation, with laissez-faire reforms likely to encourage large numbers of small producers and therefore potentially higher potency levels and consequent long-term harm. 

Although the impacts on criminal justice and treatment costs would likely be ‘modest’ – at around £200-300m – the document estimates that the tax revenue from licensed cannabis supply in England and Wales would be between £0.4-0.9bn, ‘far less than some of the assumptions that have appeared in the policy debate’. However, the contribution to ‘reduction of the government deficit’ would be between £0.5–£1.25bn, it says.

What the study did reveal was ‘large gaps in our knowledge and in the data resources that would be required to supply the missing evidence,’ said co-author Professor Stephen Pudney. Some of these ‘may never be filled adequately, because of the extreme difficulty of estimating the true long-term causal effects of variations in drug use on outcomes’, he said, with more sustained investment in data and research needed to better understand the impacts on areas such as drug-related crime and demand behaviour.

‘In these times of economic crisis, it is essential to examine the possibilities of more cost-effective drug policy,’ said Amanda Feilding, director of the Beckley Foundation, which commissioned the report. ‘Our present prohibitionist policies have proved to be a failure. Cannabis comprises 80 per cent of all illicit drugs consumed worldwide. If we are to protect the young, surely governments can do a much better job than the cartels.’

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