DUMB DRUG POLICIES ENRICH CRIMINALS

WHO WOULD have thought that cavalier lending practices in the U.S.
Sunbelt would damage the second-largest industry in British Columbia?

No, I'm not talking about forestry and lumber. I'm talking about
dope. BC Business magazine reckons that marijuana production in B.C.
contributes $7.5 billion and 250,000 jobs to the province's GDP -
second only to construction, and more than forestry.

Most of the product is exported to the United States. The RCMP
estimate that marijuana is being grown in about 20,000 B.C. homes,
not to mention sizable farms in the Interior and large-scale
commercial operations in former warehouses and industrial buildings.
One academic study concluded that if marijuana in B.C. were
legalized, the province would see $5 billion in additional legal
business activity and could collect $2 billion in taxes.

The ranks of British Columbia marijuana producers have also broadened
remarkably. Cannabis cultivation is no longer the exclusive preserve
of organized crime, though organized crime certainly continues to
thrive in the fetid netherworld of prohibition. Today, however,
marijuana production has become a sideline for thousands of otherwise
law-abiding middle-class citizens.

As a recent BBC report put it, "Much of the revenue derived from B.C.
Bud, as the cannabis crop is known, goes on paying college fees,
perhaps buying a second car or making that holiday to the Caribbean
just a little bit more affordable." As a result, "the trade is so
large that the police in B.C. are faced with an impossible task."

Indeed they are, and the job is getting harder. The RCMP drug section
in Greater Vancouver once employed more than 100 officers; it's now
down to 60. The number of tips they receive about grow-ops has also
fallen, from 615 in September 2003 to 207 last December.

Does that mean that the number of grow-ops has fallen? Probably it
has, says Tony Emery, a leading cannabis advocate and leader of the
B.C. Marijuana Party.

For one thing, the rising Canadian dollar has hurt the
competitiveness of B.C. Bud, just as it has hurt filmmakers, the
forest industries and furniture manufacturers.

In addition, the downturn in the U.S. economy has induced many
Americans to try their hand at growing their own pot. Marijuana
plantations have been turning up in the national forests, while
laid-off workers and homeowners facing foreclosure have been
converting their basements and spare rooms into grow-ops. Even a tiny
operation using only a couple of high-intensity lights can earn
$20,000 a year for the owner - in cash, and tax-free.

"It certainly is enough to tide people over, no problem," Emery says,
"and two lights are not going to get you into trouble, either."

So there you have it. Predatory and foolhardy lending practices in
the United States lead to a wave of foreclosures. Wary consumers stop
buying. Workers get laid off. Desperate for cash, the victims of the
downturn try their hand at illicit agriculture. At the same time, the
rising loonie makes B.C. Bud less competitive, so Canadian growers
find their markets contracting.

What's so striking about this story is that it really is not a story
about crime and the law. It's a business story, and almost all
accounts of the situation treat it that way. In theory this whole
industry is illegal, but in practice it's so big that the police
can't even begin to control it. Any serious attempt to enforce the
law would require an army of police officers and gobble up so much
public money that governments would almost have to abandon such other
concerns as health care and education.

So the business is completely unregulated and the only controls on it
are the controls the market itself imposes. As with any business,
unfavourable market conditions affect the industry. Adverse exchange
rates and increased competition drive prices down and eliminate
marginal producers.

Nevertheless, the market is huge and hungry. It reaches into every
social class and every age group, though a recent study from the
University of Alberta apparently revealed that marijuana is
particularly popular among educated, middle-class Canadians. Do they
wish to break the law? Probably not. But do they think this law
deserves to be obeyed? Obviously not.

In short, the law has essentially made itself irrelevant. If
anything, the law benefits the business. To a large extent, the
industry is profitable precisely because it is illegal. All
entrepreneurs take risks, but if the risks include jail time, only
the boldest entrepreneurs will enter the business - and they'll
demand a premium for the extra risk.

The net result of our irrational drug policies is that we enrich the
criminals and criminalize ordinary citizens. We control tobacco and
alcohol far more effectively than we control any illegal drugs. If
those are the results we want, these policies are perfect.

Silver Donald Cameron's columns for The NovaScotian appear online at
silverdonaldonsunday.blogspot.com/