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Bad news for B.C. -- decriminalization is coming, to the U.S.A.

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To twist the lyrics of Leonard Cohen, "Decriminalization is coming, to the U.S.A." That, or outright legalization.

This is good news and bad news. But it's likely to be bad news for lots of Canadians who live in British Columbia. And it could begin happening in less than two weeks!

It's starting in California, of course, where the Golden State, which is broke, is on the verge of completely legalizing marijuana, if only as a way to raise badly needed tax revenue. (Under the U.S. Constitution, criminal law comes under state jurisdiction. In Canada, of course, it is a federal responsibility, so even if they took it into their heads to do so, British Californians would be unable to follow suit.)

On Nov. 2, Californians will vote on Proposition 19, a statewide referendum that if passed would legalize marijuana and allow local governments to collect pot-related taxes. Pro- and anti-Prop-19 campaigners are busy in the state. But even if Californians don't vote for outright legalization, Gov. Arnold Schwarzenegger has already approved a law reducing possession of marijuana to the equivalent of a $100 parking ticket.

Civilization will not end, and California will not sink into the sea -- or, at least, if it does, it'll be because of an earthquake and not a drug-induced frenzy. Anyway, such a seismic upheaval would likely take British Columbia along with it, rendering the point of this post moot.

The good news is that California pot legalization -- or even mere decriminalization -- will mean the beginning of the end of the counterproductive, expensive, destructive, pointless and often tragic "war on drugs," at least its marijuana front.

This won't happen overnight, of course. It will take years, with the likes of Prime Minister Stephen Harper hanging on to punitive mandatory sentences for insignificant possession, harsh enforcement and senseless expenses for unneeded new prisons as if their political lives depended on it -- as indeed they may, given their core constituency.

But one by one the states of the U.S.A., most of them like California broke anyway after years of right-wing economic mismanagement, will give up on the doomed war on weed, if only for sound fiscal reasons. Then, as we so often do -- for good or ill -- Canada will bob along in their wake.

The bad news -- other than for those of us who make our livings enforcing drug laws, training dogs to sniff out the stuff, manufacturing Kevlar vests and the like -- will take longer to sink in.

But decriminalization is ultimately an economic decision. Not only will it increase tax revenues some places, it will decrease economic activity elsewhere. Most obviously, while there will continue to be profit in growing, packaging and selling marijuana, it will be nowhere near the magnitude of the industry's profits today.

This may come as a surprise to most of us who don't buy or use illegal drugs, but that's bad news for British Columbians because the economy of that province -- which is not unlike that of a so-called narco-state -- is so heavily dependent on marijuana production. Arguably it's bad economic news for all Canadians for the same reasons, whether we recognize it yet or not.

Because the Canadian marijuana industry is illegal, it operates almost entirely off the books, generating virtually no tax revenue and precious few records. So estimates of what it's worth to the B.C. economy are all over the map. But even the small numbers are big, with estimates starting at around $3 billion a year and rising as high as $20 billion, double the legal revenue generated by B.C.'s forest industry.

The Wikipedia puts the number at $6 billion. Britain’s Guardian newspaper puts at $20 billion. In 2006, the B.C. forest industry's direct economic activity totalled about $10 billion, representing 7.4 per cent of the province's GDP.

The driver of the huge profits for growing marijuana in Canada and smuggling it south, of course, is enforcement and prohibition. That motive will largely disappear with legalization or even decriminalization. Why risk smuggling pot from Canada if you can grow it legally at home in Los Angeles?

And why grow pot in secret urban grow ops all over Western Canada if there's no profit in smuggling it to the States. The secret Canadian drug industry -- built up in increments over the past 40 years -- will quickly collapse.

What's the big deal, you might wonder, if, like most of us, you neither buy nor use the stuff, nor have any involvement in this illegal industry whatsoever?

The problem is that, arguably, whether you do or not, you do. Why do retail businesses do so well in British Columbia's Lower Mainland? At least in part because of pot profits. So you benefit if you're a retailer in B.C. even if you retail products that have nothing whatsoever to do with the drug trade.

Why have house prices remained high and stable throughout Western Canada, especially B.C., even as they are collapsing in the United States? Untaxed profits from the drug trade certainly help, and may even underpin them. So if you're a homeowner, hoping to finance your retirement through the sale of your Vancouver or Victoria house, you too benefit from B.C. bud.

Even municipal taxes in communities that would otherwise be recession-bound depend on the illegal Canadian drug trade.

As columnist Douglas Haddow argued in the Guardian, if California legalizes, about all we Canadians could do to save our economic skins would be "to follow suit, legalizing on a national level and taxing the industry a la tobacco or alcohol."

This, however, would present a huge political problem to the Harper government, both in terms of dealing with pressure from U.S. states that don't legalize immediately, and its own perception of how to play to its political base. The same can be said of most provincial governments.

Whatever they decide to do, one thing is certain: Decriminalization is coming, and not just to the U.S.A.

This post also appears on David Climenhaga's blog, Alberta Diary.

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