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Major Studies of Drugs and Drug Policy
Cannabis Control Policy

 Cannabis Control Policy: A Discussion Paper

 Health Protection Branch

Department of National Health and Welfare

January 1979

The Cannabis Market

Despite intensive efforts to eradicate the cannabis trade, marijuana, hashish and hash oil are probably more readily available now than at any other time in Canadian history. Large international networks, capable of smuggling literally tons of cannabis into the country in a single venture, have evolved over the post decade, and substantial seizures and severe penalties appear to have had little or no effect on national availability.

Prices have tended to stabilize recently, domestic cultivation has expanded, and marijuana, the most common cannabis product, has tended to increase in potency as once-rare strains and more discriminating tastes have come to characterize the retail market.

The source countries for the Canadian market have remained the same over the decade, although there has been some reordering in terms of the amounts contributed by each country. Hashish still comes from the Middle East, North Africa and parts of Asia; Mexico, Colombia and Jamaica are the major sources of marijuana. In recent years, however, the Mexican marijuana trade has become disrupted because of intensified enforcement efforts, including the herbicide-spraying programme and increased border and coastal patrols. Consequently, many smuggling organizations simply shifted to countries such as Colombia, now Canada's largest contributor of marijuana, where the crops are less physically vulnerable or regimes more hospitable.

This reordering of source countries has had a number of effects. The size and sophistication of smuggling operations has increased. In addition, there has been a marked increase in the potency of the marijuana available in Canada, since the more equatorial locales generally produce plants superior in THC content to most Mexican cannabis. The available data suggest a three- to fivefold increase in average marijuana potency over the past seven years. In this same relatively brief period, the strength of the hashish typically available in this country appears to have declined to the point where it is more or less equivalent to that of marijuana, suggesting the difficulties of chemically or legally distinguishing between these two cannabis products on the basis of potency alone.

Initially, domestic cultivation of cannabis operated on a relatively small scale, but by 1976, commercial production had become a significant factor. Although domestic cannabis is not particularly popular among consumers at present, it will become increasingly marketable as growers develop the experience and technology necessary to produce more potent varieties, or in the unlikely event of a sustained shortage of foreign supplies.

Even if the present sources of supply were eliminated, there is no shortage of possible countries in which cannabis could be grown. In many regions, cannabis cultivation provides a higher return per unit of land and per unit of labour than even poppy cultivation. The possibility of finding a viable crop substitute or developing an income replacement programme for cannabis cultivation is extremely bleak in the foreseeable future. The likelihood of greatly improving cannabis enforcement in the potential source countries is also discouraging.

The young entrepreneurs of the 1960s, who imported relatively small quantities of cannabis, are being increasingly replaced by older and more experienced smugglers involved in large-scale operations. However, cannabis importers tend to be less sophisticated than their counterparts in the heroin trade, and the market does not appear to be linked to organized crime syndicates, such as the Mafia. It is assumed that the lion's share of the domestic market is met by these large-scale importing operations; smaller importers continue to operate, and become particularly important when the market is disrupted.

Some violence does erupt in the cannabis market from time to time, but these episodes seem to be chiefly related to cheating or theft, rather than territorial rivalry. Upper level distributors tend to deal only in cannabis; however, some retail dealers also handle other illicit drugs, including amphetamines and LSD. There appears to be little overlap between the cannabis and opiate narcotics distribution systems.

Within Canada, the marketing systems for hashish and marijuana are similar, although on the upper levels of distribution they are largely discrete entities. The larger the initial quantity that arrives in Canada, the more numerous are the levels of distribution between importer and consumer. Each level of distribution involves different financial risks and chances of detection and arrest, as well as different profit margins. At the lower levels, financial returns are so small that only those committed to using cannabis would bother to become involved. The return for some dealers is solely realized in cheap or free supplies for personal use; indeed, many so called "dealers" operate only or primarily to ensure themselves and their immediate friends a continuous supply of cannabis at bulk-purchase prices.

Any effort to reduce cannabis consumption must include measures directed at the reduction of both supply and demand. Supply, however, does not appear to be significantly influenced by either expensive interdiction methods or repressive sanctions.

During the last ten years, Canadian law enforcement resources devoted to cannabis have probably increased twentyfold. While this upsurge in resources has increased cannabis arrests by more than 1000 percent, there has been no significant increase in the price of cannabis products in relation to disposable income, no sustained shortages of marijuana, and only temporary regional shortages of hashish.

These disappointing results are attributable to a number of factors. There are almost no serious barriers to entering the cannabis importing business or participating in the distribution system. The profit margins in the illicit traffic are powerful inducements, even in the face of severely punitive sanctions. The underground romance of dealing cannot be discounted as a motivating factor.

In summary, our experience since the late 1960s strongly suggests that the Canadian cannabis market is largely immune to increasing arrests, raids, and other law enforcement efforts. The resilience of the international and national cannabis markets in the face of sophisticated enforcement endeavours suggests that Canadian demand is unlikely to exceed supply, in the foreseeable future.

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