We appear to be on the cusp of a major change in the laws surrounding the use and sale of cannabis. Several nations have now decriminalised usage, and the first steps toward full legalisation have taken place in Uruguay and some US states.

UK drugs minister Norman Baker has refused to dismiss the possibility of such a move here, prompting many to consider the prospect of a legal cannabis market and just how it would work. People are wondering if decriminalisation alone might be enough. If the market is left to its own devices, could it still deliver desired outcomes? One alternative might be to opt for full legalisation and state control, with cannabis taxed and licensed.

Of course, we now have real-world examples to compare. Uruguay is regarded as the pioneer of cannabis legalisation yet its policy for regulation is riddled with anomalies. Cultivation and sale remain illegal outside a set of strict exceptions. These caveats permit households to produce up to 480g of cannabis per year and allow for the creation of “cannabis clubs” similar to those already in existence in Spain.

Considering that “seasoned” cannabis users will often use in excess of 30g per week this seems an excessively small allowance. Perhaps in light of this, the government grants licenses to produce commercial cannabis to a limited number of private companies. Even so, buyers are restricted to a limit of 40g per month. All users are made to register on a database in order to deter cannabis tourism.

The picture in the US is even more complex. Despite federal law prohibiting the use and sale of cannabis, several states have opted to deviate from statute and allow usage, again, with various caveats. California, for example, permits the use of cannabis for medicinal purposes (a system widely abused) while also reducing penalties for possession to misdemeanour status. Washington state and Colorado have opted to legalise and license cannabis cultivation and supply while others such as Vermont have decriminalised possession of less than one ounce (28 grams).

Homegrown problems

These weed markets are still mostly in their infancy (at least in their legalised forms) and it may still be too early to judge them a success or failure. But here in the UK, suggestions of what a post-prohibition cannabis market might look like have already run into a variety of problems.

Take the guide produced by the drug charity Transform, for instance. It is probably the best available but many of its proposals, particularly those relating to regulation of home production, are still unworkable. CLEAR, a political party that campaigns for reforms to cannabis laws, runs into similar problems in their own proposal with calls for limits on the number of plants or lighting wattages that would be impossible to enforce.

CLEAR also proposes a ban on the sale of home-produced cannabis, thus allowing commercial growers to dominate the market. Suggesting, as Transform does, that domestic growing for personal use is unlikely to have significant impact is optimistic in the extreme. The size and scale of the already existing home grow sector would say otherwise, not to mention the existing criminal organisations who are not simply going to walk away from the market.

The idea that cannabis control policy could mirror that of alcohol and tobacco is also misguided. Any attempt to regulate cannabis must recognise the nature of the drug itself; high quality weed can be easily and regularly grown at home. The same cannot be said for either alcohol or tobacco, which means any regulation would require a new approach, particularly in respect of taxation.

Taxing questions

The problem of how, and what, to tax clearly demonstrates the complexities of any potential move toward legalisation. It’s all very well saying there are “economic benefits” to regulating cannabis, but figuring out an effective tax system that delivers both revenue and consumer value would be much harder.

One suggestion is for dual tax bands. Strong “skunk” cannabis and high-quality resin would attract higher revenues than lower grade product. This would not only favour the large-scale commercial grower, (who could afford to pay for batch strength testing) over the smaller cultivators but, proponents argue, would also “discourage the use of more potent strains”. But this fails to realise that the major appeal of “skunk” cannabis lies in its potency, and any attempts at limiting this serve only to force users to continue to grow their own.

Duty based on number of plants should be ruled out due to significant differences in yields per type of plant and growing method used; it would be like taxing beer and champagne at the same rate as they both come in bottles. A more practical suggestion is for a levy of one pound per gram, regardless of the type of weed. This alone would raise almost a billion pounds per year in duty.

Unless there is a massive reversal of public and political will, it seems cannabis will be either legalised or decriminalised in the near future. But despite the best efforts of those favouring reform to draft a workable proposal of post-prohibition cannabis markets, it’s clear that there are still issues to be resolved.

Perhaps the answer will come from the experiences of nations that have taken the plunge first. Certainly, those of us who are thinking beyond legalisation to a functioning weed market are keeping a keen eye on Uruguay, California and elsewhere. If those places fail to provide any concrete lessons, then the UK looks set for a period of trial and error.