LEGALIZE, TAX POT FOR $2-B TAKE, THINK-TANK SAYS

Why Let Criminals Profit? Professor Asks

OTTAWA -- Marijuana should be legalized, then taxed like any other
product, says a study by an economic think-tank.

The Fraser Institute estimates that such a move would easily generate
more than $2 billion a year in additional tax revenue.

All that would really change is that governments, rather than
criminals, would enjoy the spoils, argues the study being released
today by the Vancouver-based institute.

The potential tax revenue is based on the study's estimate that in
British Columbia alone, the annual marijuana crop, if valued at retail
street prices and sold by the cigarette, is worth more than $7 billion.

"Using conservative assumptions about Canadian consumption, this could
translate into potential revenues for the government of over $2
billion," the study states. "In British Columbia, as in other
provinces, notably Quebec and Ontario, it is a significant crop that
fuels organized crime."

Study author Stephen Easton, professor of economics at Simon Fraser
University and a senior fellow at the institute, estimates that there
are as many as 17,500 marijuana grow operations in B.C. alone.
Marijuana is widely produced and about one-quarter of Canadians admit
to having used it, the study says. As such, the broader social
question has become not whether to approve or disapprove of
production, but rather who should enjoy the spoils.

"If we treat marijuana like any other commodity, we can tax it,
regulate it and use the resources the industry generates rather than
continue a war against consumption and production that has long since
been lost," Easton said. "It is apparent that we are reliving the
experience of alcohol prohibition of the early years of the last century."

In British Columbia, indoor marijuana cultivation and consumption
appears to be higher than in the rest of Canada, the study notes. The
most striking difference is that only 13 per cent of offenders in the
province are actually charged, a number that climbs to 60 per cent for
the rest of Canada.

In addition, the penalties for conviction in B.C. are low, the study
said. Fifty-five per cent of those convicted receive no jail time.

A modest grow operation of 100 plants generates $80,000 a year in
gross revenue, and with production costs of about $25,000, the
potential return on invested money is a high 55 per cent, the study
says. It currently costs $1.50 to produce a marijuana cigarette, which
sells for $8.60.