Would Legalizing U.S. Pot Destroy Canada's Economy?

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"Could pot legalization drive voters to the polls?" bloggers asked a few days ago. Douglas Haddow, writing at the Guardian, has a different question: if Americans eventually go through with marijuana legalization, could it wind up crippling the Canadian economy? Here's the issue:

Over the past 20 years, Canada has developed a substantial and highly profitable marijuana industry that is almost completely dependent on the US market. Between 60 and 90% of the marijuana produced domestically is exported to the US via cross-border smuggling operations. It's exactly like the alcohol prohibition of the 1920s, only far more sophisticated and more profitable. The establishment of a legal industry based in the US would likely cripple these exports overnight.

The Canadian economy is currently doing much better than many, explains Haddow. But California's November referendum could change all that. Because the marijuana industry isn't exactly above-the-table, it's hard to know how much of the Canadian economy is wrapped up in it. Haddow does have some frightening figures, though: "it is in the range of $20bn per year (£12.5bn), making it Canada's single largest agricultural product." In British Columbia, "roughly one in 14 adults" are employed in the marijuana industry.

That's a lot. Could Californians unintentionally kill the Canadian economic recovery?

This article is from the archive of our partner The Wire.