The economics of cannabis

Business Standard     5th December 2020     Save    

Context:  Potential benefits of legalising Cannabis

Arguments in favour of legalising Cannabis:

  • Popular opinion across the globe: e.g. 
  • Some states in the US voted for decriminalising drugs 
  • World Health Organization (WHO) decided to remove Cannabis and Cannabis from “Schedule IV of the 1961 Single Convention on Narcotic Drugs”.
  • (Schedule IV asks for strict control of drugs, which are particularly liable for abuse and harm.)
  • Medicinal applications: Helps in reducing pain and nausea, easing symptoms in anorexia, epilepsy, cancer and multiple sclerosis. 
  • Not a deadly drug:  Cannabis has a low risk of death, but it is susceptible to addiction.
  • A strike against racism: E.g. in America, large numbers of people of colour are in jail for marijuana-related offences.
  • Ease the work of law enforcement agencies: E.g. The states in the US where marijuana was legalised had shown a drop in corruption and ancillary crime.
  • Economic benefits: E.g. The exchequer of the states in the US where marijuana was legalised has gained substantially from taxes out of legal sales, Holland profits from Ganja tourism.
  • Geographical indications: Manali hashish, Malana hash-oil, and Kerala seedless deserve Protected Geographical Indications as “goods with a specific geographical origin”.

Relevance of Cannabis in India

  • Origin: Indians have been using ganja (the dried flower) for millennia, in traditional medicine, recreationally, and in religious ceremonies. It is not a British Import
  • Hypocrisy about Consumption:  Naga sanyasis are allowed to consume while actors are arrested in witch-hunts.
  • Legal Provisions:
  • Ban of hashish (cannabis resin) in the 1960s: Preconditioned by the US for its food aid via PL 480 Program.
  • Narcotic Drugs and Psychotropic Substances 1985, treat Cannabis on par with heroin.
  • Ganja is still sold legally in a few states.

Conclusion: India has the potential to dominate the global market of $350 billion for Cannabis if India legalises Cannabis.