Commonwealth, Common Goals: How Canada’s Cannabis Laws Are Inspiring Australian Politics
Being the only two nations so far to have legalized recreational cannabis use, the eyes of the world are on Uruguay and Canada; success in either could provide substantial fuel to other countries that may be considering their own forms of cannabis legalization.
One of those countries possibly on the brink of legalization is Australia. Legislators and members of the public alike have been looking to the recent developments in Canada, their commonwealth cousin, to see whether similar recreational cannabis laws could be of equal success in the Australian marketplace.
As a country, Canada has a reputation for being particularly forward thinking when it comes to social issues. The country was the fourth in the world, and the first country outside of Europe to legalize same-sex marriage back in 2005, and Canada’s public healthcare system champions the values of equal access, fairness and equity. To many, the legalization of cannabis use was the next logical step in Canada’s current progressive trajectory, spearheaded by Prime Minister Trudeau and his Liberal Party.
Similarly, Australia has come to pride itself on its public health and social policy. Australia’s attitude towards the control of dangerous and addictive tobacco products has consistently led the way for the rest of the world. For example, Australian workplaces and public places started to phase in smoking bans as early as 1986, and introduced plain packaging legislation in 2012. By comparison, the United Kingdom implemented similar restrictions much later, with the nation’s first smoking ban in public places being introduced by the Scottish government in 2006, with Wales, Northern Ireland, and England successively followed suit in early 2007. Similarly, plain packaging legislation in the U.K. was only introduced as recently as May last year.
Australia’s attitude toward prohibition
With such a strong regulatory framework already existing for the regulation and taxation of tobacco products, many in Australia are calling for the country to follow the lead of Uruguay and Canada by allowing the creation of a recreational cannabis market. In general terms, the support for cannabis legalization is high in Australia; a poll done by Essential Media saw 55% of respondents indicate that cannabis should be legalized, regulated, and taxed in a similar way to alcohol or tobacco products, compared to 26% and 13% percent respectively feeling opposed or strongly opposed to legalization.
Cannabis is also already widely used by a significant number of Australians. The 2016 National Drug Strategy Household Survey from the Australian Institute of Health and Welfare revealed that 35% of people in Australia (6.9 million) over the age of 14 had used cannabis at some point in their lifetime. 2.1 million people also reported having used cannabis within the last 12 months. By creating a regulated cannabis market to serve this user base, it’s anticipated that Australia could greatly ease the strain on law enforcement from processing minor drugs charges, as well as reducing the power of the country’s black market. Some have also suggested using the money generated from the taxation of cannabis to fund alcohol and drug treatment programs in a similar fashion to what is done in Colorado, where tax revenue is used in part to fund youth drug abuse prevention and treatment programs.
The financial motivation
For tax revenue to fund any kind of program, cannabis legalization must first prove to be a financial success.
Before Canada legalized recreational cannabis, the cannabis industry data analytics firm New Frontier Data released a report detailing a cannabis market projection for the country following legalization. In the report it was estimated that the Canadian legal cannabis market could be worth up to $7.6 billion CAD ($6.0 billion USD) by the year 2025. This figure does not include the potential revenue generated from Canada’s cannabis export market, and so in actuality the market worth could even exceed this figure. Canada’s total addressable market pre-legalization was also assessed to be worth around $8.6 billion CAD ($6.4 billion USD).
While we won’t know if this prediction will ring true until 2025, the early signs are promising. On the first day of sale alone, three of Canada’s 13 provinces and territories saw sales in excess of $600,000 CAD. It is also reported that Canada generated around $8 billion from cannabis-related investment within the first month since legalization.
New Frontier Data has also speculated on the Oceanic (Australia, New Zealand, and the islands comprising Melanesia, Micronesia, and Polynesia) cannabis market, revealing its current total addressable market (TAM) worth to be around $5.0 billion USD. As explained by New Frontier Data, “Australia’s TAM is approximately three-quarters of Canada’s TAM, which is significant for a country with just two-thirds of Canada’s population”. Pro-legalization campaigners in Australia can point to these figures in conjunction with Canada’s successful market opening as evidence of Australia’s strong position if they were to follow in Canada’s footsteps and create a legal cannabis market.
Movements towards legalization
While these projections are theoretical, it is important to recognize the very real action that is already being taken within Australia with a view to ending cannabis prohibition.
Three jurisdictions in Australia — South Australia, the Australian Capital Territory (ACT), and the Northern Territory — have already used their powers to decriminalize the possession of personal amounts of cannabis, with this possession being punishable by a caution or minor civic penalty instead of criminal charges. The Australian Green Party have also made the legalization of recreational cannabis a part of their party policy, stating that drug use should be treated as a health issue and not a criminal issue.
In terms of active legalization proposals, a Labour party backbencher, Michael Pettersson, is currently championing a legalization proposal for personal cannabis use in the ACT. Pettersson’s bill would see the ACT end the issuing of cautions and fines for minor possession (defined as less than 50 grams of cannabis product or up to 4 cannabis plants). The bill reportedly has the support of all 12 members of the ACT Labour party, but support will be needed from either the Greens or the Liberals in order to pass. Green party parliamentarian Shane Rattenbury has said that in theory his party does support the bill, but would need to wait until the full bill has been published and amendments made before he would be comfortable fully committing his support. The bill has been tabled, with debate potentially starting on the issue as early as February. If passed, it will be the first cannabis legalization measure to be successful in Australia, and many will be hoping that it opens the floodgates for more.
