Could the Economy of a Nation Benefit from the Legalization of Cannabis?

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Throughout the ages, Cannabis has been extolled as one of man’s greatest benefactors— and cursed as one of his greatest scourges. Cannabis is undoubtedly an herb that has been many things to many people. For several thousand years Cannabis has had many significant uses and has traces of its existence even before Christ. Cannabis sativa is considered a herb, which today is also know widely by names like Hemp and Marijuana and are they are nothing but 2 different varieties of the same plant which have different components. The main difference between hemp and marijuana are reasons of growth which can be for fibre/oil seed for Hemp and for marijuana it can medical/recreational uses, THC content in case of hemp it is less than 1% and of course legal status. The legal status being one the biggest barriers that is preventing most of the countries from benefiting from this versatile and efficacious plant which has the capability of covering up the production of a variety of products like fuel, medicine, paper, food, rope, maps, clothes, nets, lace, soap, sails, shoes, plastics, explosives, caulking, fibre , paint, sealant, methanol, gasoline, fibre for fuel, bricks, charcoal, auto bodies, packing mass, lubricants, oil for lighting and fuel, animal food, furniture etc. In 1937 the US passed a law called the “Marijuana Tax Act” strictly put a hold to the sale and production of all cannabis products nationwide and the Controlled Substances Act of 1970 deemed all varieties of cannabis as drug (including marijuana and hemp), but on the contrary it is legal to Import Hemp products in to the US and annual sale of Hemp products is said to be 580 $ annually.

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Hemp and Marijuana are two 2 varieties of the same plant called Cannabis Sativa and in the USA as per the Marijuana Tax Act all cannabis products have been made illegal except in 9 states where it is allowed to carry marijuana for personal use. The underlying factor about legalizing cannabis (marijuana) is that it has proven to have significantly lesser risks and does no harm to man. There are nearly 50000 deaths caused due to alcohol and almost 400000 deaths that can be linked to tobacco smoking per year which when compared to marijuana which is nontoxic and has no history deaths caused due to over dose.

Similarly another variety of Cannabis also popularly known as hemp or industrial hemp which has been made completely illegal in the USA. According to the Controlled substance act 1970 does not make growing hemp illegal rather, it places strict controls on the production of hemp, making it illegal to grow the crop without a DEA permit. The Marihuana Tax Act defines “marihuana” as – The term marihuana means all parts of the plant Cannabis Sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound … or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination. So the existing problem that arises with the legalization of Cannabis is that one needs to seek permission from the DEA to be allowed to produce hemp. Even though there is a state approved law to grow and produce cannabis he/she would still require the DEA’s permission otherwise could face federal charges or may get his/her property confiscated. Even though there are states permitted laws permitted a person to grow cannabis they still have to seek the permission of the DEA and abide by the strict rules for Cannabis production. There are many cases reported where the DEA not granted any permit of production of Cannabis (hemp) even for research purposes. It is very contradictory because in the USA it Illegal in to grow or produce hemp but it is legal to import hemp products.

Researchers and various State Authorities in Canada have conducted studies which puts light on the positive effect on the market brought about by the growing of hemp and also due to its demand for the diverse potential of products and uses of hemp. Certain reports have claimed that by removal of the current restriction on hemp agricultural producers in the USA would benefit.

When it comes to Marijuana in the USA, Washington and Colorado were the first two states to pass the law that regulates the legal production, distribution and sale of marijuana and this took place in November 2012, By 2012 December it was legal in Washington for adults over the age of 21 to possess marijuana for personal consumption. The first ever Marijuana retail store opened in 2014. Ever since Marijuana was made legal in the USA by the passage of I-502, Retails marijuana has accounted for nearly $80 million in the form of tax revenue, Millions of dollars were again saved because there was no need to prosecute petty marijuana offenses, there has been a steady decline in Violent crimes and numerous people have been let off the consequences of Marijuana arrest and state voters still support legalization of marijuana.

Several state reports which were based on studies conducted on the potential of then Hemp market in the USA rather proved to not be a very profitable and have any great impact. A study done by the USDA’s projected that U.S. hemp markets “are, and will likely remain, small, thin markets” and also cited “uncertainty about long-run demand for hemp products and the potential for oversupply” among possible downsides of potential future hemp production. A study conducted by the UW-M states that the production of hemp does not have the possibility of generating profits big enough even though it does have the potential of being slightly more profitable over the row crop, it will most likely generate lesser profit then speciality crop and this is because the technology and process involved in harvesting it is very labor intensive, and in a country like USA would cost a lot to produce per unit. This study highlights that U.S. hemp growers could be affected by competition from other world producers as well as by certain production limitations in the United States, including yield variability and lack of harvesting innovations and processing facilities in the United States, as well as difficulty transporting bulk hemp. The study further claims that most estimates of profitability from hemp production are highly speculative, and often do not include additional costs of growing hemp in a regulated market, such as the cost associated with “licensing, monitoring, and verification of commercial hemp.

A research done by the University of Kentucky tries to put some light on certain issues and challenges that the growers, processors and industry might face in the state of Kentucky. Firstly, the study concludes that even though there are profits generated from the production of hemp it is shown to be that significant that the farmers of Kentucky should shift to growing of hemp and also the study also reveals that the increase in employment will be in the short run as the it is estimates that the number of new jobs might be in dozens and not even in 100s and all of this boils down due to the uncertainty of the industry.

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