Is Cannabis the New Oil?

Uruguay became the first country to legalise cannabis in 2013, though commercial sales were only implemented in 2017 and are limited to 16 retail pharmacies. As yet, it remains little more than a trial. The recent legalisation in Canada represents a more significant "experiment", not least because it is a G7 economy, but again it will be highly regulated. In the US, 9 states (plus the District of Columbia) allow the sale of marijuana for recreational use, and 31 states allow it for medical use, producing a legal market worth $9 billion a year. Estimates for the size of the potential Canadian market range from $4 to $6 billion. Were the US to legalise cannabis at a federal level, the national market might be as large as $50 billion, which would be somewhere between video-games and cigarettes. The global market for cannabis is likely to be over $200 billion, out of a total global market for all illicit drugs of over half a trillion dollars (it's obviously difficult to estimate this with precision - some think the global market may be as big as $4 trillion - but one illustrative claim is that drug profits were key to the banking sector's liquidity in 2008).

Aside from the eccentricity of Brexit and the contingency of the Syrian refugee crisis, the long-term move in the developed world has been towards more open borders; and despite Donald Trump's efforts to confect and win a trade war, the secular trend is still towards the freer movement of goods as well. This means that the illegal drug trade is becoming progressively more difficult to interrupt. Combined with the commercial potential, this leads policy-makers to consider whether accommodation might be a better strategy than prohibition. Another macro-level development that is changing the dynamics of the drug market is the rise in synthetics. In the short-term this encourages small-scale production, which leads to problems with quality-control and risk-management (notably avoiding police raids and laundering proceeds). In the medium-term it will encourage the creation of large-scale production facilities in parts of the globe where oversight is slack or the authorities are compromised, fuelling greater trade. In the longer-term it will make the development of major domestic production facilities - i.e. close to the retail market - more attractive both to producers and to authorities prepared to treat drug use as a problem of safeguarding and regulation.

At the micro level, the social distinction between cannabis and legal drugs, such as alcohol and tobacco, has blurred to the point where smoking a spliff is only likely to generate protest because of the smoke while staggering drunkenness is now considered a greater faux pas than being out of it on a park bench. Vaping, with its more sophisticated paraphernalia and dedicated shops, looks like the template for a new retail infrastructure rather than the last gasp of an old one. The emergence of first ecstasy, then skunk and now spice has been framed by the media as primarily a matter of health and safety, with much concern over poor quality control and unscrupulous practices among producers and dealers. There is obviously an irony here given the media's usual attitude to H&S, but it also indicates the power of the notion of consumer protection and the responsibility of the state in this area. While legalisation is probably a long way off in the UK, this has less to do with the power of the press than the historic association of drugs with race and class.

The linkage of drugs with criminality has long been a proxy for race politics, from the "yellow peril" fear of the late 19th century's opium dens to the black and latino association with marijuana. This has also allowed drugs to be presented as an alien plant invasion, a frame of mind that allowed the McCarthyite paranoia of Invasion of the Body Snatchers to live on in official culture. It is no coincidence that the area of the United States most resistant to the legalisation of marijuana has been the Old South, any more than that blacks are disproportionately more likely to be frisked or end up in jail for possession. I doubt the Confederacy will secede over the issue, but the de jure emergence of two Americas seems likely before any federal legislation to legalise marijuana nationwide, and one that will be made concrete in the already disproportionate size of the prison industry across the states. In this light, Canada's initiative clearly owes something to a nation that is consciously multi-racial (at least in the big cities) and where race itself is not a simple proxy for class.

Historically, drugs have been accorded a social status and legal consequentiality based on their class incidence. Cocaine has never lost its upper class "fast set" cachet, and users have usually been treated relatively leniently by the law, while the shift in attitude towards opium and its derivatives from the acceptable laudanum to the unacceptable heroin largely reflected the growing association first with the Chinese in the nineteenth century, then with hardcore bohemians for most of the twentieth century, and finally with housing estates battered by socio-economic change in the 80s and after (and flooded by cheap heroin following the Iranian revolution and the war in Afghanistan - the shape of the "market" is never wholly beyond the power of the state). The treatment of both skunk and spice in the British media has been heavily class-inflected, though it is notable that the former has become less of a bogey as more middle-class kids have suffered psychotic episodes while the latter has become associated with prisoners, the homeless and (for no better reason it seems other than proximity to TV production in Salford) Manchester.

The call for drugs to be regulated has been growing for years, though the call is still limited to peripheral nations who lack clout (e.g. in South and Central America), international bodies that can be safely ignored (including the UN), and former government ministers who no longer control the levers of power. The latter often claim to have seen the light, but their language betrays a persistent neoliberal appetite for the colonisation of a hitherto inaccessible market. Consider Charles Falconer, the former Labour Lord Chancellor: "Above all, we need to take back control of drug supply from the most violent gangsters. And it needs to be done sooner rather than later. … To regulate drugs is to apply the regulatory principles and tools that are routinely applied to everything else to a set of risky products and behaviours that have, until now, been controlled entirely within a criminal economy". Regressive drug policies are increasingly associated with "backward" nations in Africa, Asia and (notably) Russia, and thus associated with imperfect capitalism.

Philip Collins, who is a reliable weather-vane of neoliberal thinking, has added his voice to the cause in The Times: "Canada follows the US states of Washington, Nevada, California, Massachusetts and Colorado which have all legalised cannabis for recreational use. Prohibition has done nothing to control use but has instead created a criminal supply chain. It has put people through court proceedings who ought to be nowhere near the criminal justice system and it means that drugs come on to the black market without any regulation of their strength". I don't know who he mean by those "who ought to be nowhere near the criminal justice system", but I'm not sure it's 16 year-old black kids from Peckham that he has in mind. Painting the "victims" (and ignoring the many non-users collaterally damaged by drugs) as sympathetic makes tactical sense, but this is close to suggesting that we should legalise cannabis because it is in the narrow interests of readers of The Times.

In a similar vein, Simon Jenkins in The Guardian imagines an epicurean heaven in Colorado in contrast to a hell-hole somewhere behind Shoreditch High Street, or wherever it is he buys his hash: "While Americans are spinning their weed wheels and going to sommelier classes, British buyers are left to the mercy of pub lavatories and grubby street corners. While Canadian consumers can sit in saloons and cafes, safe in the knowledge that what they enjoy is inspected and tested, Britons must run the gauntlet of violent gangs, proliferating from cities to rural 'county lines'. Their activities contribute nothing to the state, and cost it a fortune." This isn't an appeal for legalisation so much as a better class of drug-taking. It is worth remembering that alcohol prohibition in America in the 1920s may have enriched bootleggers but it didn't lead to squalor for consumers, and repeal didn't deal organised crime a mortal blow either. What it did lead to in the US was brewing industry consolidation and consequently poor quality beer for most of the twentieth century.

As a classical liberal, Jenkins emphasises both the material benefits of freedom and the improved moral tone that it entails. Collins, as a neoliberal, can't help making a different dimension explicit: "It is sometimes said that legalisation creates a free-for-all when regulation in fact disciplines supply." While the desire to open up (i.e. appropriate) a large and seemingly inexhaustible market is at the root of the current vogue for legalisation, thereby finding a new frontier for capital in case either data or water don't live up to their billing as "the new oil", we shouldn't underestimate the attraction of an industry whose regulation will be deemed socially necessary from day one. The last thing that Big Pharma or the state wants is a truly free market, with low barriers to entry and the risk of profits being eroded by competition. While artisan producers and retailers will be promoted initially, if only to establish the meta-brand, the aim will be to use regulatory leverage to advantage larger manufacturers and retail chains. Big Weed is coming.