OTTAWA - Don't fear the reefer. That's the message to the Conservative government from a group that fights to legalize pot.

The Beyond Prohibition Foundation says weed could be a real cash crop for Canada.

"We're talking about $400 million (that) is spent every year arresting just about 50,000 (people) — plus or minus a few thousand people, depending on the year — and that's just for possession," said Jacob Hunter, the Vancouver-based group's policy director.

"It goes up to 80,000 when you factor in trafficking and production. So we're talking about $400 million in savings on the possession side and then about $2 billion in revenue, assuming a whole number of variables.

"It gets a little complicated on the revenue side, because you have to figure out what the usage rate is, what the tax rate is, etc., etc. But it's a net gain for the government of about $2.4 billion."

Delegates at the Liberal convention on the weekend backed a resolution from the party's youth wing calling for the legalization and regulation of marijuana.

However, the resolution is not binding and there's no guarantee the party will ever actually campaign on legalizing pot, even though interim leader Bob Rae endorsed the position in principle.

The idea has no chance of ever becoming law under Stephen Harper's Conservative government, which has taken a hard line on drug use.

But pretend for a moment that Canada legalized marijuana so people could buy government-regulated weed in stores much like they now do with liquor.

Some argue government coffers would see a windfall.

The Fraser Institute, a conservative research group, did its own study in 2004 on potential revenues arising from legal marijuana and, like Hunter's group, came up with a $2-billion-a-year estimate.

"If we treat marijuana like any other commodity, we can tax it, regulate it, and use the resources the industry generates rather than continue a war against consumption and production that has long since been lost," Stephen Easton, an economics professor at Simon Fraser University and the study's author, said in a release at the time.

Statistics Canada says roughly half of the 108,600 police-reported drug crimes in Canada in 2010 were for possession of marijuana.

The agency notes that the Canadian Centre on Substance Abuse has pegged the cost of illegal drug use — which includes expenses for police, courts and correctional services — at about $2 billion each year.

A glance across the Atlantic offers an interesting case study in decriminalizing pot.

Portugal decriminalized simple possession of all drugs in 2001. A study published 10 years later in the British Journal of Criminology found fewer teens using drugs, fewer cases of HIV and AIDS and more drugs seized by police from big traffickers.

However, it's worth noting that Portugal already had one of the lowest drug-use rates in the European Union before it decriminalized possession.

Still, Hunter argues legalizing marijuana would actually cut down on crime in Canada.

"Any country that has liberalized its marijuana policy has actually seen a decrease in marijuana use," he said.

"I think what this really comes down to is it gets rid of the coolness factor for kids and teenagers."

He adds it would also take organized crime out of the picture and allow the government to sell weed in a controlled environment.

But what about long lineups clogging the border as American pot-lovers rush to Canada for a legal toke?

That was former American ambassador Paul Cellucci's great concern when Paul Martin's Liberal government drafted legislation calling for modest fines for people caught with small amounts of marijuana.

Hunter doubts the Americans would do anything drastic.

"I don't think the U.S. would do anything other than huff and puff," he said.

More than a dozen states have already decriminalized the drug.

Last year, Connecticut became the 13th state to do so. The Hartford Courant newspaper reported the state could save $885,000 every year in court costs and attorney salaries, and make as much as $1.4 million in fines and fees.

However, marijuana remains illegal under U.S. federal law. In Canada, the drug has been illegal since 1923.

Jean Chretien's Liberal government also tried to pass a law that would fine people instead of criminally charging them for being caught in possession of small amounts of marijuana. The legislation died on the House of Commons order paper.

Harper's Conservative government scrapped the idea entirely when it came to power in 2006 and the Tories show no signs of changing their tune.

"No, it will not happen under our government," Harper said in Vancouver last fall.

"We're very concerned about the spread of drugs in the country and the damage it's doing and as you know we have legislation before the House to crack down."

The Conservatives have yet to pass their omnibus crime bill.

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