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On the economics of a marijuana industry - redux

Published by Mark Bodnar

UPDATE (Nov. 1, 2016): Canada's Parliamentary Budget Officer released a report this morning on the potential revenue/cost implications of legalized marijuana: Legalized Cannabis: Fiscal Considerations.  

And, while scanning the news stories about that report, I learned of the Task Force on Marijuana Legalization and Regulation, which offers a weighty discussion paper on the topic.

Always new material on this burning topic! :-)  

-- MarkB

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I just noticed an interesting new videocast in our Passport database:  Opportunities for Alcoholic Drinks and Tobacco in Legal Cannabis in the US (22 Aug 2016: 4 minutes). Sample: "Alcoholic drinks and tobacco are facing the ascent of the legal cannabis industry in the United States. Accounting for US$7 billion in 2015, and with half the states already having legalized use, the legal cannabis industry could also play the role of a huge disruptor. "

This reminded me that I once wrote a post on the economics of a legal marijuana industry... way back in 2012.  That post was buried in the BUEC Buzz archive, but I've resurrected it below.  I've also added some updates as both this topic and our amazing resources have changed quite a bit over the last few years.

As with many of the posts where I explore a single topic through numerous resources, the goal isn't to be exhaustive (despite the length of the post!) -- it's to highlight a range of resources and search strategies that may prove useful no matter what bus/econ topic you are researching. Explore the links and think about how the same approach might apply for your own topic!

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From November 21, 2012 (with updates): 

With all the talk about Washington State's marijuana vote last week, it's not surprising that BC's substantial marijuana economy is in the news. Just this morning I heard a CBC news report on how a B.C. marijuana tax could net billions if pot legalized. I thought it might be fun (and timely) to look into what we have available on similar topics...

1. Starting with the CBC news story from this morning, I see that Benedikt Fischer of SFU's Centre for Applied Research in Mental Health and Addiction (yay SFU!) co-authored the study that is behind the news:

Werb, D., Nosyk, B., Kerr, T., Fischer, B., Montaner, J., & Wood, E. (2012). Estimating the economic value of British Columbia's domestic cannabis market: Implications for provincial cannabis policy. International Journal Of Drug Policy, 23(6), 436-441. doi:10.1016/j.drugpo.2012.05.003

New: Since the article above was first written, it's been cited by at least 11 articles and books. Check out those newer resources using Google Scholar via the SFU Library. (Accessing Google Scholar through us means that most search results that are already owned by SFU will open smoothly, even if you are at home.)

2. Needing a broad & deep treatment of the topic, I checked out books and ebooks via the SFU Library catalogue. Using subjects such as Marijuana industry and Marijuana - Economic aspects, I quickly found titles such as Economics and marijuana : consumption, pricing and legalisation.

New: Check out this short report from the year after my initial blog post: "Revisiting the issues around commercially viable indoor marihuana growing operations in British Columbia".  (The author went on to become an MLA here in BC.) 

3. Given that this topic has obvious economic angles to it, I thought I should try EconLit, our main database for research in economics. A search for (marijuana or cannabis) AND (legaliz* or econom*) gets me articles such as  Decriminalization Policy and Marijuana Smoking Prevalence: A Look at the Literature and The Effects of Price and Policy on Marijuana Use: What Can Be Learned from the Australian Experience?

New: Re-checking EconLit, I see 68 articles published between 2012 (when I first wrote about this topic) and now. Clearly the economists are looking closely at the economics of marijuana in a changing environment.

4. Thus far in my research, I've noticed that several resources have talked about Australia, including a few articles and books by the same author: Kenneth W. Clements of the University of Western Australia... a good chance to highlight Google Scholar's author pages that list the works by a given author in one clean table, complete with details on how often they've been cited! I see that Ken has several articles that touch on the economics of marijuana.

New: Echoing the Passport videocast that started this post, I see that one of Dr. Clements' articles brings together marijuana, alcohol, and tobacco: "The demand for marijuana, tobacco and alcohol: inter-commodity interactions with uncertainty."

More updates: 

a. I just spotted a business plan for a medical marijuana clinic in one of our newer (2015) volumes of the Business Plans Handbook series.  (Reminder: BPH plans are real, but names and addresses may be changed.)

b. I don't think we had IBISWorld when I first blogged on this topic.  On a quick look, I see IBISWorld industry reports such as: 

  • Medical & Recreational Marijuana Growing - OD4141
  • Medical & Recreational Marijuana Stores - OD4142

c. One of our BUS 360W classes worked on a marijuana legalization topic in 2014.  The research guide I built for them is still online, and it includes many more resources that may be useful for those who are researching the business/economic aspects of a legal industry.

Again, even if your research doesn't touch on this topic, the resources and strategies may be helpful.  Explore, then let me know if you have any questions or comments.

-- MarkB
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Mark Bodnar
Economics & Business Librarian
mbodnar@sfu.ca

Image credit: Source: drugs dream by SibCode from the Noun Project

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