California referendum could deal devastating blow to BC's lucrative marijuana export industry

British Columbia’s cannabis activists and law enforcement officials are bracing themselves for a political earthquake that’s set to hit California this fall when voters head to the polls to legalize marijuana. Vancouver-based activists fear BC‘s bud industry could be wiped out if California opens the door on pot decriminalization.

If the referendum passes next November, individual growers will be able to cultivate up to 25 square feet of marijuana while local governments would both regulate and tax the sale of cannabis.

“We’ve got to protect our pre-eminent position by legalizing now,” said Marc Emery, publisher of Cannabis Culture and "BC‘s prince of pot."

Speaking from his magazine office on Hastings Street, Emery (pictured below) said BC‘s marijuana industry could only compete with a possible pot haven in California if the province legalizes cannabis within the first two years of any such move south of the border.

If California legalizes, the demands for BC marijuana at $2,400 a pound will greatly diminish, said Emery, who faces a five-year jail term in the U.S. for drug trafficking and distributing cannabis seeds over the Internet. 

According to Emery, the homegrown market will evaporate if Canadian pot users flock to California for cheap, high-quality cannabis that could be available for a little as $10 per ounce, compared to the current rate of C$200 in Vancouver.

Should BC also decriminalize pot, Emery said the provincial economy could benefit from industry innovation focused on developing high-quality cannabis strains.

Hopefully, said Jody Emery (pictured below), Marc’s wife and fellow pot activist, “our politicians here can no longer say that Canada can’t legalize marijuana because the USA won’t let it happen.”

Jody Emery, a former organizer with the Marijuana Party and current Green Party candidate running on an anti-prohibition ticket in Fraserview, said legalization would decrease the influence of organized crime and cut into profits gleaned from the illegal market.

The BC marijuana industry is estimated at $5 to $8 billion and, if decriminalized, presents significant taxable revenue. William Austin, a BC Marijuana Party activist who phones MPs as part of the anti-prohibition drive, said the province and law enforcers are failing to see the bigger picture.

“The black market won’t go away but [legalization] will be a significant hit and it will allow the police to actually focus on more dangerous things like people-trafficking or weapons smuggling,” said Austin.

Jody Emery said that she and her husband bought weed from friends and acquaintances who grew marijuana in their homes, and were in the business to express their opposition to prohibition rather than to get rich.

“My role is to protect our industry and advocate for people not going to jail for a plant,”  said Marc Emery.

This is not the view of U.S. Drug Enforcement Agency, who alleged in 2005 that Emery engaged in Conspiracy to Distribute Marijuana, Conspiracy to Distribute Marijuana Seeds and Conspiracy to Engage in Money Laundering.

Canadian police arrested Emery on July 29 that year at a local HempFest in Lawrencetown, Nova Scotia, executing a warrant issued by the DEA, although he doesn‘t face any charges this side of the border.

In order to save his two friends and co-accused Michelle Rainey and Greg Williams from similar charges, Emery attempted a plea bargain, whereby he would serve five years in both US and Canadian prisons, but this fell through in March 2008, after the Canadian Government refused to approve its side of the deal. 

As a June 2009 extradition hearing loomed, Emery agreed to plead guilty to one charge of drug distribution and accept a five-year sentence in the U.S.

He formally entered his guilty plea on September 21 2009 and was imprisoned at the Surrey Pre-trial Centre a week later prior to extradition, but was released on bail on November 18.  As Federal Justice Minister Rob Nicholson hasn’t yet carried out the extradition order, Emery is still working out of his Cannabis Culture office.

While Emery said he made a total of $4 million from his seed business, he maintains that he donated all proceeds to cannabis activist groups around the world.

Both Austin and the Emerys say they believe criminal organizations with ties to Vancouver prefer pot prohibition because of the profits of the black market.

Yet, if California voters legalized marijuana, the impact on BC police would change little in the short term since pot  “causes a considerable problem for law enforcement,” said RCMP Sergeant Dave Goddard.  “It’s still going to be illegal here in Canada,” he said.

Meanwhile Staff Sgt. Goddard, a 20-year veteran of narcotics enforcement, said criminal organizations in search of new markets may expand their networks further afield to Europe and Asia.

If other U.S. states such as Washington and Oregon legalize cannabis, Staff Sgt. Goddard said the impact would eventually be felt in Vancouver.  “It would certainly reduce the market for BC bud and it would certainly have a domino effect here,” he said.  “But we won’t be seeing that for some time.”

The California Regulate, Control, and Tax Cannabis Act would allow the recreational use of up to 28 grams of weed for adults over 21 and cultivation of up to 25 square feet of plant per household.  It would be illegal to smoke in public, in the presence of minors, or on school grounds.  Driving under the influence of pot would remain prohibited.

If cannabis becomes legal in California, the state will take ownership of an industry with an estimated value of $14 billion, which would help its bankrupt government plug a deficit of $42 billion in 2009.

Nonetheless, those who oppose the measure - a coalition including California law enforcement officials - are also gearing up for a legislative fight, as President Obama’s drug czar, R. Gil Kerlikowske, condemned legalisation in an address to police chiefs in San Jose.

Brandon Steele, who works at the Vancouver Seed Bank on East Hastings, points out that if the referendum in California passes, Canadians will get a better deal on purchasing weed at home, as cheaper pot in California would drive down prices throughout the industry.  And anyone with an even minor drug-related charge on their record would have no choice but to continue buying pot in Canada, because anyone charged on a drug-related offence is denied entry into the US.

“If you can’t cross the border you can’t cross the border,” Steele said.

Recent polls show just over 50 per cent of Californians are in favour of legalising marijuana and taxing it to help reduce the state's budget deficit. A Gallup poll found that 44 per cent of Americans favoured legalisation.

A 2003 report by the Canada parliament concluded that the cannabis export business in BC was worth an estimated $6 billion annually.