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Rate of Black Market Cigarette Seizures Weaken Marijuana Legalization Arguments

By crooky | August 3, 2008

I have always been an unabashed opponent to the legalization of marijuana in Canada. I grew up next to a grow op as a child and I can tell you first-hand, smoking marijuana is not a victimless crime. Now that I’ve gotten that very controversial stance off my chest, I’d like to poke a hole in one of the arguments used in support of legalizing marijuana: that if the government regulated it, the black market would dissapear overnight.

A recent story in the Globe and Mail highlighted how controlled substances, under the watchful eye of the government still leaves room for black market activities. Specifically, black market cigarettes are being seized by the RCMP in record numbers. But wait, aren’t cigarettes legal?

One of the arguments used for legalizing marijuana is that once the government started regulating, taxing and inspecting marijuana so that anyone of legal age can buy in at a corner store, all of the black market for the drug would just dissapear. I’ve always argued that this wouldn’t be the case.

My argument is as follows:

The Globe and Mail article backs up my argument. In that article, it is cited that a smoker buying a carton of legal cigarettes from a store would have to pay $85. A “bag” of the same number of loose cigarettes costs only $6 through black market channels.

RCMP seizures of black market cigarettes are up 210% since 2001. That isn’t necessarily reflective of the scope and scale of the black market cigarette industry since it could mean that the RCMP are doing a better job of seizing goods. However, it is an indication that black market cigarettes are still readily available despite the fact that cigarettes have never been illegal.

Photo credit: Kyle Rodriguez

Photo credit: Kyle Rodriguez

I think it all boils down to pure economics. A significant number of people see black market cigarettes and legal cigarettes as reasonable substitutes for one another. The extremely low cost of the black market cigarettes is definitely an incentive but the cigarettes would have to be of acceptable quality or no one would buy them.

The tobacco industry has seen a relationship between the purchase price of tobacco and the amount of black market cigarettes that are consumed in Canada:

If these numbers are to be believed, when legal cigarettes are cheaper, the black market recedes. I can see the counter-argument now:

That’s a neat argument but it forgets the reason why we tax cigarettes. Cigarettes are a major health risk for anyone who smokes and those around them. Marijuana has the same problems. Another study has shown that smoking a joint is the equivalent of smoking 20 cigarettes (in terms of carcinogens).

Sure, most pot smokers don’t smoke every day and most wouldn’t smoke more than one joint. That doesn’t change the fact that every joint smoked is almost as bad as an entire pack of cigarettes.

Why would the government want to facilitate that? From a public policy perspective, this is a no-win situation for the government.

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Aaron “Crooky” Cruikshank is the Principal and Founder of Friuch Consulting. He has written professionally about science and technology for over ten years.

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Topics: Policy, social issues |

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