Marijuana could activate the economy in northern Australia

Marijuana could activate the economy in northern Australia

Marijuana legalization could attract cannabis tourism in the northern territories in Australia

At a time when the economy of the Northern Territories (NT) of Australia is going through a financial crisis, there are many voices that have risen demanding the legalization of marijuana as a resource that could solve the situation.

Just look at other places where marijuana has brought wealth to both citizens and the state through tourism and taxes. Indeed, as marijuana legalization progresses throughout the northern hemisphere, from Canada to Colorado, many tourists seek to have a good time in places where cannabis does not involve legal problems.

But does the marijuana industry have real tourism potential or have its possibilities been exaggerated?

In any case, what is true is that after several years of economic instability, many citizens of the Northern Territory have begun to take into account new industries that could boost the economy in crisis.

Tourism generates a lot of money. In the Northern Territory it means almost 10 percent of the gross state product and 12 percent of the workforce. Without a doubt, it is and has been an economic guarantee for many local companies and, to date, it has remained stable. For years the Government of the Northern Territories (NT) has tried different tactics to attract more tourists, spending more than $ 100 million on Instagram influencers that show the greatness of the landscape and nature of the area and to increase infrastructure investment. But what has not been proven yet is to legalize recreational marijuana. Could it be the best way to boost a new type of tourism? Is it worth offering legal marijuana in addition to landscapes and crocodiles?

At Charles Darwin University, an economist has raised the question of what would be the economic benefits for the tourism industry in the northern territories if small amounts of marijuana were legal. The conclusion has been very clear: the legalization of marijuana would probably generate great economic benefits.

If it were possible that the tourist had the legal certainty that possession of a small amount of marijuana did not involve legal problems, the effect on tourism would be positive. But if the government created a marijuana industry, the economic effect could be quite important.

Professor Gerritsen of Darwin University believes it would be very positive since legal marijuana would bring great benefits in the Northern Territory, both in the form of product sales and through an increase in state revenues through taxes and licenses. The reality is that at this time half of the marijuana in the Northern Territory comes from other states.

If the Government allowed cannabis and designated dispensaries, an industry could be created in the area with the potential to export. Although Gerritsen fears that the creation of a recreational marijuana industry could boost drug use, he is also convinced that this risk is a reality thanks to the black market. However, this economist is convinced that the Northern Territory Government will not do anything about it.

Extrapolation of the example of cannabis tourism in Colorado

The most complete studies on the relationship of the benefits of a legal marijuana industry have so far been conducted in Colorado since it legalized marijuana for recreational use in 2014.

The studies of the revenue department of the state of Colorado conclude that since cannabis was legalized, tourism grew 51 percent in four years. And last June an information was released according to which Colorado has generated more than one billion US dollars (1.43 billion Australian dollars) in revenue from the legal marijuana industry since it was legalized.

A team of Colorado consultants and researchers published a report on the economic impact in 2016. According to this report, the cannabis industry created more production and employment per dollar spent than 90 percent of other industries, and 18005 new full time jobs were created in the state during 2015.

However, Colorado has almost 6 million inhabitants, a very different amount to the 250,000 of the Northern Territory. Therefore, can the data be extrapolated? One of the most important Canadian cannabis companies believes that the Northern Territory could be one of the largest cannabis growing areas in the world, and in fact, the company expressed its desire to grow medical marijuana at the end of last year.

The company’s president of communications told the media that the area had great advantages in his favor; especially the perfect climate for cultivation and also access to the Australian market and to all of Asia.

Black market

There is no Australian research applicable to the economic benefits of recreational use of marijuana since it has not been legalized in any state or territory of the country.

Although Canberra, the capital of the country, has decriminalized the possession of small amounts of marijuana and even wants legalization, the bill will have to overcome many obstacles on the part of the Commonwealth, which has the ability to annul territory legislation.

An economic study carried out by the Parliamentary Budget Office in 2015, which was requested by former Senator David Leyonhjelm, concluded that the Federal Government of the country would likely see its revenues increased by $ 259 million during the 2015-16 period. The study assessed income and also the decrease in the costs of law enforcement.

Medical cannabis is a thorny issue in Australia since the country imports almost all of its medical cannabis because it is not approved by the Therapeutic Products Administration. But even if it is not approved, it can be accessed through the Special Access Scheme, which authorizes approved doctors to prescribe the medication.

A 2014 study on the net social benefits conducted by the University of New South Wales on the legalization of recreational use did not obtain relevant conclusions since it deduced that there were similar economic results whether cannabis was available for free or not. However, the study believed that there was a difference between who could bear the costs and who would benefit from the change.

The study states that the criminalization of cannabis involves large expenses for the criminal justice system. Other researchers believe that legal marijuana prices would have to go down a lot in order to end the existing black market in the country. Obviously, the fall in legal cannabis prices would have a negative impact on government revenues.

Is cannabis tourism positive for the country?

Actually, at present this debate is almost sterile since the Minister of Tourism, Lauren Moss, has completely ruled out legalizing the recreational use of marijuana in the Northern Territory; At least for the moment. The Minister acknowledges that in the states of Colorado, California and Oregon recreational cannabis use is legal and that this has led to an increase in the number of cannabis tourists. But the Minister believes that promoting cannabis tourism would seriously undermine the country’s reputation.

The Minister states that due to this risk of undermining reputation, there is a fear that some tourism investors do not want to have anything to do with tourist destinations in which cannabis is promoted. In Australia, marijuana for recreational use and all related products are considered drugs, according to the Therapeutic Goods Administration. For this reason, financial institutions are not likely to support tourism projects that promote marijuana, even if their use were legal, both in the NT or in any other region of the country.

In any case, the Minister said that the NT government did not intend to invest in research on the possible benefits derived from marijuana tourism. Therefore, at the moment legalization is far from being a reality.

Legal status of marijuana in Australia

Some Australians are not very clear about the legal situation of the right to grow cannabis plants. Is it legal to grow cannabis in Australia? First of all you have to know that recreational marijuana is illegal and, therefore, recreational cultivation is also illegal.

Cannabis is a plant widely consumed in Australia, both for recreational and medicinal use. According to a demonstration report, one third of all Australians aged 22 or older have tried cannabis and 1 million have used it during the past year. An estimated 75,000 Australians consume cannabis every week, and approximately 300,000 consume it daily. The indigenous population of Australia has higher levels of cannabis use.

Marijuana can only be grown for medicinal purposes if you have the licenses required by the ODC (Office of Drug Control). Several permits, import and export licenses and TGA approvals (TGO93) are also needed for cases of medical necessity.

Although recreational use of cannabis is illegal in Australia, the country has avoided a punitive drug policy.

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