The Economics of Legal Weed

To my mind, the strongest reason to overturn cannabis prohibition is on moral grounds. Caging millions of non-violent people worldwide for cultivating, distributing, or consuming a natural plant is clearly not the best way to achieve social well-being in most countries.

This applies especially well to Zambia, considering we have caged more than 17,000 people for drug-related offenses in just the last three years, massively contributing to the deeply immoral and unsustainable overcrowding in our prisons.

But let’s look at another of the strongest arguments for legalization: plain economics. As Zambia’s populations grows, the nation’s economy will need to create hundreds of thousands of jobs, not least of all to pay the taxes government will need to pay the extraordinary debts that will soon haunt us.

As economist Muna Hantuba recently pointed out, Zambia is unlikely to be able to pay back the first Eurobond of $750 million when it comes due in 2022. And that’s just the first Eurobond. As of September last year, our national debt stood at almost $10 billion. What will that number be in 2022 and beyond?

If we are serious about raising revenues to pay that debt, while also creating formal, tax-paying jobs for young people, then we should get serious about the economic potential of legal cannabis, and not just for medical purposes. Here’s why…

1. Non-psychoactive cannabis, or industrial hemp, is practically a “miracle plant” that developing country such as Zambia should take advantage of. Before cannabis was criminalized in the 20th century, hemp was used to produce just about everything in the industrial economy: rope, sailcloth, paper, paint, lubricants, food, clothing, and thousands of other products.

When talking about industrializing our economy and creating manufacturing jobs, we need to ask ourselves which industries we can build; what products we can make; what markets we can sell to; and what raw materials we have in Zambia. That last question is particularly important. As a landlocked country we can’t manufacture things for export that require imported raw materials.

Industrial hemp is the perfect raw material for this country. Not only could we grow it in abundance, it can also be used to create more than 25,000 different products, from household items like soap, cooking oil, and food, to commercial and agricultural goods such as textiles, animal feed, and biodiesel.

Zambia has an ideal climate for growing industrial hemp, which can be grown for seed or fiber. Unlike our current cash crops, hemp does not require fertilizers or pesticides, and produces cloth which is much stronger and longer lasting than cotton.

If we are serious about industrializing our economy, we will need to be clever and competitive in this globalized world. Industrial hemp could give us a boost in terms of growing our own raw materials easily and cheaply, and producing consumer goods that could be sold in the global market.

Imagine retooling Mulungushi Textiles to produce chitenges 10 times stronger and longer lasting than current imports from Nigeria or China. If we are smart and open-minded, we could be exporting our hemp chitenges (and soap and oils and animal feed etc) to the rest of Africa and beyond.

Imagine colourful, high quality “Made in Zambia” hemp chitenges being sold in North America and Europe. If we open our minds, we can see the possibilities of a legal “marijuana-based manufacturing industry”, and of course…

2. Manufacturing means jobs. And we desperately need jobs in Zambia. Depending on who you ask, Zambia’s youth unemployment rate stands between 10% and 25%. Even if these figures are accurate, they only count youth between 15 and 24, and ignore the fact that half the population is 16 years and under. The harsh reality is that in the next 10 to 15 years we will see worsening youth unemployment unless we find ways to create significant numbers of jobs, let alone employ the youths of today.

As it happens, legal weed is proving to be a massive jobs creator. According to Forbes, the marijuana industry in the United States will create more than a quarter of a million jobs by 2020. Surveys of cannabis professionals show the industry already employs as many as 150,000 people in the US. In Colorado alone, 18,000 full-time jobs were created in the marijuana industry in 2015.

This should come as no surprise, as the industry demands a lot of local goods and services, including warehousing, equipment, security, transportation, bookkeeping and legal services, among many others. That does not include direct employment in retail, marijuana-related manufacturing, administration, regulation and taxation, and of course…

3. Tourism is a big potential growth area for Zambia, and marijuana tourism is growing fast. Legalizing cannabis would immediately put this country on the map for millions of travellers who could be persuaded to come to Zambia based on their ability to enjoy the herb.

The potential for marijuana tourism should not be discounted for one moment, and any future legislation regarding legal cannabis in Zambia should allow permits for foreign tourists to legally access it for personal use.

Jamaica is considering special airport kiosks where tourists can obtain permits to legally purchase marijuana when they arrive. The “spiritual home” of ganga decriminalized small amounts of cannabis in 2015. That same year, the US state of Colorado saw a record 77.7 million tourists who spent $19.1 billion, generating $1.13 billion in state and local taxes.

Speaking of taxes…

4. In North America, legal marijuana sales reached $6.6 billion in 2016. Colorado topped the sales charts at $1 billion in legal sales, generating nearly $130 million in taxes and fees. Legal marijuana could soon generate up to $28 billion in yearly tax revenue in the United States alone, a crucial source of income at a time when budgets are being slashed across America.

Of course, the United States is different from Zambia, but what country on Earth can survive without raising tax revenues? As part of our goal of reaching middle-income status by 2030, we will need to generate enormous amounts of taxes in order to fuel government spending on development and social services.

Taxes and fees on legal marijuana sales could help us get there. A whole economic structure would develop around legal weed, such as it has in Colorado and other states and jurisdictions. The economic growth potential is massive, not just for the West but also for developing country such as Zambia. After all, cannabis has been grown and used in these lands for countless generations already. The only difference is that we would finally be regulating, taxing, and benefiting from it.

5. Besides generating tax revenue, legalizing cannabis also has the positive effect of saving millions of dollars in policing, judiciary, and correctional costs.
US federal drug control spending reached $31 billion in 2016, with domestic law enforcement alone costing nearly $10 billion. These figures do not include money spent at the state level, nor costs of legal defense, meaning that the true cost of criminalizing drugs is undoubtedly higher.

While Zambia is a smaller country by economy and population, we too have been spending untold millions of dollars on our own “war on drugs”, especially cannabis. In the last three years 17,107 people have been caged for drug-related offenses, an average of 16 people every single day, the vast majority of them poor and marginalized Zambians caged for cannabis.

There are no statistics available to confirm how much the Zambian government spends on controlling cannabis and other drugs, nor how much is spent on court and policing costs. As a secretive “security wing” agency, DEC is exempt from outside scrutiny and financial auditing and oversight, and is not required to divulge its budget costs or revenues.

Neither do we know the full cost of cannabis prohibition on those who are caged, not to mention their families and friends. The majority of Zambia’s cannabis convicts are poor people, mostly peasant farmers and unemployed youth who could not afford a lawyer. Many are family breadwinners, and all have families that must maintain their loved ones in prison.

Our ancestors would be shocked and appalled that we cage people for “dagga”, and that we close our eyes while unknown thousands of nonviolent poor and vulnerable fellow Zambians suffer the shame and disease and violence of prison, just because they grow or use a plant that has been grown and used here for a thousand years.

Our ancestors would be shocked, and we should be ashamed. No matter how “dangerous” dagga is―and it does have some drawbacks―putting poor people in prison for it is much worse. At the very least we must release cannabis “offenders” on bail rather than letting them rot in remand.

In the end, you see, the economic argument becomes the moral one and vice versa. It is simply no longer economically or morally sustainable to allow DEC to mass-cage our fellow citizens for cannabis.

Whether we do it for economic considerations or for the moral imperative, we must end the “war on cannabis” in Zambia.

         

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