A year ago, Colorado legalized the sale of marijuana for “recreational use,” and so did the state of Washington. Oregon and Alaska should join them soon. It’s a totally new economic sector based around the cannabis that is emerging in the United States.
Some are already comparing this moment to the end of the prohibition of alcohol at the beginning of the 1930s. Other than the four states previously mentioned, around 20 others have authorized use of the drug for medicinal purposes.
The Weed Supermarket
For just the state of Colorado, 1,200 companies have been created in the sector of distribution. The profit margins are such that venture capital firms are ready to invest – like the rapper Snoop Dogg – several tens of millions of dollars.
Some sort of weed supermarket, which would sell both the product and the necessary paraphernalia to consume it, is being created. It’s called Marley Natural – they’re using the image of the saint-boss of smokers, Bob Marley.
That represents more than 2 billion euros for the only legal market in the United States in 2014, and around 10 billion in 2018. Cannabis is selling for 10 euros per gram. Each consumer can have up to an ounce (28 grams) at a time.
“Specialized firms have been created to carry the money in armored vehicles…” – François Lenglet
The problem is that this kind of transaction is still forbidden in banking. U.S. federal law prohibits the trade of narcotics, and banks depend on the Federal Reserve. Suddenly, companies are hiding their money at home. They have bought hundreds of safes and used the services of transporters of funds to pay their taxes in cash.
Specialized firms have been created to carry the money in armored vehicles, with former soldiers from Iraq and Afghanistan. Likewise, the dealers have filed a case at the Fed to create their own bank so that they can be paid at home by credit card.
A Value Added Tax
What was the advantage of legalizing cannabis? The liberal argument is that if we legalize it, we eliminate its trafficking and its considerable profits. The best way to hurt the traffickers, they say, is to attack their portfolio.
The opponents respond by saying that this is no soft drug, and the government should not encourage behaviors that are dangerous to health. But the people of Colorado voted, and approved the legalization. The state also made substantial profits.
It brings in tens of millions in taxes in Colorado. It’s way more than was imagined, to the point that the state is considering returning a portion of the money to the taxpayers since there is so much tax revenue. Thanks to the VAT, the value-added tax! They are simple taxes on cultivation (15 percent) and consumption (10 percent).
A Law Proposal in France
In France, a bill to this effect was filed last week by 11 environmentalist members of parliament. The Greens are, of course, friends of plants, but the other members of parliament who probably could care less about preserving nature have not followed their lead. There will be a new debate in April.
Other countries have adopted this legislation. We often speak about the Netherlands, but it may just be a question of tolerance since the drug is still illegal there. There’s only one country that has legalized it: Uruguay.