CALIFORNIA CANNABIS LAW GOES UP IN SMOKE

Earlier this week, voters in California cast their ballots for or against
Proposition 19 -- a controversial initiative that would have legalized
marijuana in the sunshine state. They ultimately voted against
legalization, preventing a loss for British Columbia of about $2-billion
annual revenue, made through illegal exports of marijuana to the United States.

Although the monies generated from the growth and export of marijuana are
illegal and difficult to estimate, the B.C. bud industry produces an
underground economy of around $7-billion annually according to a 2004 study
by the Fraser Institute, making it one of the largest industries in the
province.

A large portion of marijuana produced in B.C. is exported across the border
and is sold for up to $300 or $400 per ounce in California.

If the drug were to be legalized in the state, prices would likely plummet
as the risk factor would disappear, leaving an increase in supply and
demand, lowered production costs, the ability to grow larger yields, and
decreased retail price.

A drastically overturned market could potentially mean the end for some of
the estimated 17,500 grow operations in B.C., many of which are located in
and around the Kootenay region. These would be faced with the high-risk
production of a relatively unprofitable product, compared with today's prices.

Although Proposition 19 was voted down on Novemeber 2nd, with 56.5 percent
opposed and 43.5 percent in favour, supporters will push for the
proposition to reappear on the 2012 ballots, where voters will once again
decide the fate of a portion of the profitable pot industry in Canada.

Staff Sergeant Marko Shehovac of the Columbia Valley RCMP, who has been
noted for his vocal opposition to the drug, said voters made the right
decision when they marked their ballots.

"I'm glad that the voters voted down this issue ... it appears that
although supporters are very vocal at every opportunity, the silent
majority spoke up."

With regards to organized grow operations in the Kootenays, things will
continue on as usual, Staff Sergenant Shehovac said.

"Organized crime is going to be with us regardless of the vote. There is a
strong debate about this issue. I just deal with the law that's on the
table at the time."