LEGAL POT'S POT OF GOLD MAY BE ELUSIVE

Marc Emery is a rich man. He could be a whole lot richer - but, first, the
feds have to put him out of business.

"I want to be the Martha Stewart of marijuana," said Emery, founder of the
B.C. Marijuana Party and one of the nation's better-heeled legalization
lobbyists.

Right now he's more like the Lois Hole of marijuana. His mail-order seed
business grosses a reported $3 million a year - a business he sees
collapsing utterly if the feds follow through on a Senate recommendation to
legalize marijuana for possession, purchase and production.

Like any budding mogul, Emery's got plans. Sooner or later, he said, pot
will be completely legal under licence in this country - either because of
a shift in federal policy or through a Supreme Court ruling.

When that happens, the real money in marijuana won't be made from selling
the weed itself. It'll be made through selling the ancillary merchandise -
bongs, pipes, papers, clothing, bumper stickers, books and magazines.

"You won't make money from selling grass. You'll make it from selling the
lifestyle," said Emery. That's why he publishes the glossy mag Cannabis
Culture. That's why he's looking to get into retail sales of the stuff.

Starbucks is a relentless merchandiser, hawking everything from deluxe
coffeemakers to board games along with the lattes. Martha doesn't make her
millions from baking cookies - she makes them from selling a lifestyle
people want to emulate. Emery's business plan probably doesn't involve
decorative wall sconces or Pyrex cookware, but you get the idea.

"Right now, pot goes for $225 to $275 an ounce. Legalize it, and that price
drops to $35," he said.

"The business will be divided between very large commodity crop growers and
backyard operations growing for personal consumption. That'll drive down
the price."

But will it drive up consumption? That's the question everyone's asking
this week in the wake of the Senate report.

Will more people be lighting up if reefers become available at licensed
7-Elevens, next to the Slurpee machine?

It all depends on how much rope the feds give to people like Emery.

"Decriminalization" and "legalization" are two very different things, which
is why the Senate report caught many people off guard: no one expected them
to go that far.

"The experience with decriminalization has been that consumption doesn't
tend to go up long-term," said Andy Hathaway, a sociologist at McMaster
University who testified before the Senate committee. Hathaway is citing a
2000 published study comparing decriminalization in 11 U.S. states and one
Australian territory. In both countries, the districts that reduced
marijuana possession penalties to a fine found little or no appreciable
increase in consumption.

Those who weren't smoking grass to begin with weren't encouraged to do so
by decriminalization: they had other reasons to avoid marijuana, mostly to
do with the health risks of consumption.

When people were more concerned about the health risks, the study said,
they were less likely to light up. The risk of being arrested was found to
have little effect.

If the effect of decriminalization on consumption is neutral, the effect on
policing costs is fairly amazing.

South Australia decriminalized in 1987; in 1995-96 it actually made about
$500,000 in fines after enforcement costs. The territory estimates it would
have lost about $1 million on full criminal enforcement had it still been
in place that year.

In Canada, the cost of drug enforcement is pegged at between $700 million
and $1 billion, and marijuana accounted for 70% of drug-related charges
laid in 1999. The fiscal case for decriminalization looks better all the time.

That said, there's a flaw in any scheme to make money off legal marijuana:
how do you persuade people to pay a markup for something they can grow in a
windowbox?

Nobody's going to be able to turn pot into the next boutique cash crop
unless the retailers can do unlimited marketing.

Emery sees himself someday launching a coast-to-coast advertising campaign
to push marijuana as a safer, more enjoyable recreational drug than either
alcohol or tobacco.

"Consumption would go up, maybe temporarily at first," he said. "In a legal
environment, who could stop us from advertising?"

The feds could; they control where tobacco companies advertise, after all,
and they aren't likely to give pot growers carte blanche. Without that,
Emery's business plans might well remain pipe dreams only.