STUDY SEES POT OF GOLD IN ILLEGAL B.C. CROP

Governments Advised to Tax, Regulate $7-Billion Marijuana Harvest

VANCOUVER -- The grass really is greener in British Columbia, to the
tune of $7-billion a year, according to a landmark study by the Fraser
Institute.

In fact, so much, so-called "B.C. bud" is harvested illegally in the
province, with police efforts to stem the growth almost totally
futile, study author Steve Easton says that the time has come to
legalize, regulate and allow governments to tax marijuana.

"Police resources should be deployed elsewhere," the Simon Fraser
University economics professor contended yesterday.

"Marijuana is too easily produced . . . and the return on investment
sufficiently great that for each grow-up demolished, another takes its
place. There is a perpetual, lasting supply of people willing to do it
[grow marijuana]."

If Prof. Easton's $7-billion estimate of the annual worth of cannabis
cigarettes produced in B.C. is correct, marijuana has become one of
the most valuable commodities in the province.

It would trail only forestry, which contributes about $8.9-billion
annually to the provincial economy. The latest figures for tourism
indicate a $5-billion economic contribution, while construction
accounts for $5.3-billion.

The report by Prof. Easton estimates there are as many as 17,500
marijuana grow-ops in the province.

Yet few of those busted by police face serious punishment in British
Columbia courts.

Prof. Easton found that only 13 per cent of possession cases result in
actual charges, compared with 60 per cent in the rest of the country.

Further, looking at statistics from Vancouver, 55 per cent of those
charged with running a grow-op receive no jail time, while 13 per cent
were given sentences of one to 31 days.

"While police resources are spent to destroy nearly 3,000 marijuana
growing operations a year, the consequences are relatively small for
those convicted," Prof. Easton says in his comprehensive report.

Despite this, police task forces continue to kick in doors and
dismantle individual operations. One jaded police force recently
headlined its continuing efforts in a press release with: "Another
day, another grow operation."

Grow-ops have been found in the most exclusive neighbourhoods in posh
West Vancouver, on the same premises as daycares and even on a rented
property belonging to former premier and provincial attorney-general
Ujjal Dosanjh.

The bourgeoning industry is so widespread that the B.C. Real Estate
Association now requires sellers to indicate whether their property
has previously been used as a marijuana grow operation.

Prof. Easton said the scale of the marijuana industry is not
surprising, despite its illegality. "There's a good rate of return.
It's a profitable business."

In his report, he sketched the return for a "modest," 100-plant
grow-op.

That should produce 13 kilograms of marijuana sold in pound blocks
"out the back door" at $2,600 a pound, amounting to a harvest of close
to $20,000, he said.

"With four harvests per year, gross revenue is nearly
$80,000."

He set production costs at about $25,000, yielding a return on
investment of around 55 per cent.

Canada would be much better served if marijuana were legalized and
taxed, he said, noting that 7.5 per cent of Canadians currently smoke
marijuana.

Based on the current price of marijuana cigarettes, he calculated a
resulting annual tax benefit of more than $2-billion.

"As it stands now, growers and distributors pay some of the costs and
reap all of the benefits of the multibillion-dollar marijuana
industry, while the non-marijuana-smoking taxpayer sees only costs,"
Prof. Easton says in the report.

He likened the current situation to the era of alcohol prohibition in
the early 20th century that spawned a huge increase in organized crime
with little benefit to the public. "I don't think it's a good thing to
do to smoke marijuana. I'm an economist. But we should treat marijuana
like tobacco and alcohol."