A rchive Date
[ 19-10-2019 ]
Category
[ International Relations ]
sub-Categoy
[ Canada ]
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[http://business.financialpost.com/opinion/terence-corcoran-bring-back-the-cannabis-black-market-the-closest-perfect-example-of-a-free-market
Bring back the cannabis 'black market' - the closest perfect example of a free market
Terence Corcoran
October 18, 2019 9:30 AM EDT
Somebody somewhere must be working on a script for Potbusters, the hilarious story of the bumbling attempt by Canada’s political, regulatory and corporate establishments - the high powers of the mixed economy - to take over the national market for cannabis. It’s a riot of bureaucratic slapstick, pompous posturing, regulatory pretentiousness, corporate schemers and botched financial planning: a true comedy.
Opening scene:
A character played by Bill Murray, an old pro operator of flame-thrower equipment, arrives at a suburban Toronto warehouse to perform his Potbuster duties. Wearing heavy gear with the words “Health Canada” written across the back, he looks through grizzled, experienced eyes at a 12,000-kilogram mound of cannabis. There’s something you don’t see every day. Gotta be worth a hundred million at least,” he says.
Beside him, also in Health Canada gear, is another old pro Potbuster played by Dan Aykroyd: “Oh my God. This is a harmless mound of pot. Something I’ve loved since my childhood. Something that could never possibly destroy us. We used to smoke it by the fire at Camp Oconda.”
“So what. We got a job to do - one, two, three.” The characters crouch down and blast flames at the cannabis, which explodes in yellow blaze and pungent smoke. The Aykroyd character breaks down, almost in tears. “How did we come to this?”
Somebody else can finish the script, but it’s a good question.
The scene describes the latest wonky development in Canada’s absurd one-year-old cannabis legalization experiment - the very first policy initiative of Prime Minister Justin Trudeau’s newly elected Liberal government in 2015.
Since then, hundreds of millions of dollar have been splashed around the country by investors looking to make quick dollars by manufacturing and distributing a product that already had a functioning, low-cost market system in place. Some call it the black market, but the existing market was in fact the closest perfect example of a free market - a low-cost, high-quality product - without the benefit of stock brokers, securities regulators, scheming politicians and corporate wheeler-dealers attempting to capitalize on government regulation.
It turned out one of those companies, CannTrust Holdings Inc., had been secretly growing cannabis products in unlicensed portions of its Ontario facilities, without proper approval from Health Canada. The department moved in, seized the products involved, and has ordered their destruction. How? Who ya gonna call? Potbusters.
How did we arrive at a point where a legal corporation finds itself in the clink for doing what thousands of people have been doing illegally and mostly freely for decades?
Here’s another funny scene set-up for this regulatory/corporate comedy: The offices of Statistics Canada in Ottawa, where the nation’s crack statistics bureaucrats set up a team to plumb the data depths of the national cannabis market. They called it the Cannabis Stats Hub, which produced StatsCannabis data. Look it up if you think I’m kidding.
Since establishing the Cannabis Stats Hub about five years ago, the agency has been cranking out hilarious reports and studies, with such titles such as “Experimental Estimates of Cannabis Consumption in Canada, 1960 to 2015,” “Crowdsourced cannabis prices,” and “A Cannabis Economic Account - The Framework.”
The StatsCan cannabis hub produced some of the data that fuelled last year’s mad hype around legalization. In fancy reports, the hub estimated the annual consumption of cannabis at more than 700 tonnes and the dollar value of black market sales at $5.7 billion in 2017.
The fine print was funny, though. Regarding the 700 tonnes, the report warned that there were numerous uncertainties. “Cumulatively, the uncertainty about the volume estimate is sufficiently large that it could reasonably be reduced by about 54 per cent or increased by about 95 per cent.” The 700 tonnes, in other words, could actually be less than 350 tonnes.
As for the price and value, collected via crowdsourcing methods, StatsCan estimated that 4.9 million Canadians spent $5.7 billion on cannabis for medical and non-medical purposes. The dollar value of cannabis production in 2017 was bigger than beer and tobacco production, it said. Data allegedly showed that the age of pot consumers was getting older, consumption was rising and - best of all - prices were falling. A note to readers of the report warned that the data was based on a lot of assumptions and might not be all that reliable. More recently, StatsCan reported that its price information is now collected by “scraping the websites of illegal online retailers. Since the prices collected through web scraping include only illegal online purchases of cannabis, they are not fully comparable with the StatsCannabis data which include both online and other purchases of illegal cannabis.”
Free-market cannabis prices are apparently now down to around $7 a gram and lower.
The funny bit here is that Canada’s official statistics agency has been busy building up data on an industry that has been unregulated and illegal for decades, mainly to allow governments and scheming corporations to seize control of a market that to all intents and purposes has been wildly successful.
By all accounts, the previously existing free market in cannabis still delivers the best outcome: low prices, high quality, and ease of purchase. As reported recently in the Financial Post, unregulated market sellers are set up all over the country ready to serve consumers.
The logical conclusion: In an ideal world, Canada should have simply declared cannabis legal. End of plan. Let the current players get legal. Instead, state planners aimed to subvert the free market and install a modern regulated corporatist model that drove up prices, failed on quality and stumbled setting up retail systems.
And now - hilariously - the cannabis establishment wants to clamp down on the free market, which it conveniently brands as the black market.
Could we start again? Send in Potbusters to take down the lawyers, bureaucrats, corporate dealers, securities regulators and tax collectors. Let the old free market run the cannabis industry.
Financial Post
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 World Fact Book (CIA)]
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