Road to an Economic High: Pristine Vision or Pure Delusion?

Physical welfare and the quest to seek the cures to all its ailments have been the single most quintessential task humankind have embarked on. 

Both natural and chemical remedies have been in consideration but with the former proving more efficacious and desired. Humans' foray into nature to quench such quest naturally leads them to come across a forbidden yet medically proven plant -- Cannabis. 

Ever since its discovery, the devil's lettuce has been the focal point of discussion as it is still banished legally from most countries despite harnessing immense medical prowess. 

Lengthy discussions and considerations of legalization have been carried out shortly after the mass banishing of the plant with the world uncovering the multidimensional potential of which cannabis possesses including its potential contributions to the economy of a country if it were to be legalized. The laughing grass's tale and legal status have, as with other countries, undergone a stable but conflict-ridden life in Indonesia.

Prevention of a national high

Weed, or as commonly referred to by locals as ganja, has seen a plethora of controversies ever since its introduction by the Dutch. It was utilized in a myriad of ways including as an intoxicant and an opium substitute due to its mind-altering capabilities, a cure for plenty of diseases such as gonorrhea (which was the main reason why it was grown in Ambon), and even as a strong fragrance with narcotic effects for shops (Dania and Tom, 2016). 

The road to a national high was blocked in 1927 through the restriction of cannabis access to the Dutch East Indies as an implementation of the Verdoovende Middelen Ordonnantie (a narcotics decree) due to the inclusion of cannabis in the International Opium Convention of 1925. This act marks the beginning of the increasingly strict barriers to access marijuana. 

As a whole, the archipelago has been known for being draconian about drugs even amongst Southeast Asian countries. Such punishments that are able to be given to convicted users can range from a lengthy prison sentence to even death.  

Up until October 2019, there has been a total of 274 people nationwide which are awaiting their death sentences. In Jakarta alone, a total of 26 people are awaiting their fate to end and 24 of those criminals are awarded death sentences for drug-related crimes.

One particular case of which was engraved in the minds of Indonesian was the ill-fated romance narrative of Fidelis Arie. Certainly far from being effervescent, Fidelis' dilemma begins with his wife being diagnosed with syringomyelia (severe spinal cord disease caused by a fluid-filled cyst growth inside it) of which was only able to be cured using marijuana as a remedy. To sustain his wife's well-being and in hopes of curing such a severe disease, Fidelis grew ganja plants which he then proceeds to harvest himself to give to his lover. 

However, due to the illegal nature of the plant, he was arrested on the 19th of February, 2017. He was awarded a 5-month sentence for growing a forbidden plant by the judge. His sentence was later increased to 8 months with an Rp1 Billion fine. Not having access to the natural cure needed to relief her disease, his wife later passed away on the 25th of March, 2017.

This specific case and many other cases that exhibit some use and potential of the forbidden intoxicant drove part of the public to support the idea of legalization. A collective movement spearheaded by Dhira Narayana named "Lingkar Ganja Nusantara" strived for the legalization of the devil's lettuce so that Indonesians and mankind as a whole could reap the benefits of the herb. Its goal to raise awareness on the benefits harnessed by the said sinful plant has been sought after through radio publications, social media activities, and other methods with an end goal of gaining public support. 

Despite all of their efforts, however, ganja legalization still isn't prioritized by the government. On the International Antidrug Day which was held on the 16th of July 2019, the national institution tasked to eradicate corruption BNN (Badan Narkotika Nasional) has made it clear that weed legalization is not and will never be in consideration as it is clearly stated in the constitution UU no.35 year 2009 on drugs that cannabis is included in the long list of prohibited substances and therefore any activities involving it is illegal. 

Additionally, it was also made clear that any collective movement striving for hash's legalization is closely monitored. As with every rational decision made by rational human beings, one or multiple reasons must be taken into consideration by these political elites; including the multidimensional ganja legalization movement. 

The economy, being one of the most fundamental aspects of societal living, ought to be heavily impacted by the possible legalization of weed. One might then ponder; if the legalization of the aforementioned prohibited laughing grass was to occur, what might be the costs and negative economic repercussions of unleashing the chains of regulations on the devil's lettuce?

Costs of flying high

Steps, albeit tentative ones, toward fully releasing the legal shackles on marijuana use have been done by some states in the "land of the free". Recreational uses of marijuana are legal for adults above the age of 21 in 11 states while medical uses are allowed in 30 states. Data and recent findings from the USA will be used to give reference for us to be able to visualize the possible economic reality of weed legalization. Despite the general image of an economic utopia, the utilization of marijuana by the masses does have some quintessential costs as can be seen from the USA's experience. 

Honing in more on the recreational use of marijuana, studies from the USA have proven that finding tranquility by enjoying the forbidden herb does result in health complications. Firstly, it should be noted that findings from the state of Colorado exhibit that 3% of medical marijuana users have eventually continued their uses in the recreational sector (Lucas and Walsh, 2017). 

The dangers of utilizing cannabis recreationally come from the addiction that has aroused in a collective of individuals. The risk of being dependent users (often referred to as CUD or Cannabis Use Disorder) is relevant for 9% of all marijuana users (Voklow et al. 2014) and an even more terrifying 25-50% of daily or near-daily users have to cope with the risk. 

The costs in remedying these disorders are gargantuan as an average individual is expected to pay around $20,381.5 to set free from the addiction (Xiu, Yonkers, and Ruger, 2014; Mayo Foundation for Medical Education and Research, 2018; Advanced Recovery Systems, 2018). Those numbers translate to a total of $32 million needed to treat CUD diagnosed patients in Colorado in 2017.

As an essential part of the labor market, the economic repercussions of being a flneur are certainly relevant. Prior research has shown that marijuana legalization leads to higher use of marijuana (Wen, Hockenberry, and Cummings, 2015) of which have shown to have connections with the lowering of wages accepted by young adult males (Sabia and Nguyen, 2016). This phenomenon is explained by the higher amount of school dropouts experienced by marijuana users (Roebuck, 2004) and thus earn lower wages (Van Ours, 2007). 

A recent study done by Dominic K. Albino in 2017 which utilizes panel data from 2000-2014 has shown results that policy changes towards the liberalization of  marijuana decrease labor productivity. In the year following the policy change, labor productivity decreased by $1322 on average per employee. This amount is statistically significant when tested with a 5% significance level. 

The sector most affected by this is the construction sector which experienced a loss in labor productivity as big as $3,963 per worker in the year following the policy alterations. This loss might be attributed to the lousy nature of workers after consuming the banished substance.

The underground movement and public consensus regarding the legalization of the devil's lettuce must also have several multidimensional rationalizations, including economic-related ones. One might also ponder about the economic benefits of which can and have been reaped as a result of legalizing the debarred plant.

As You Sow, So Shall You Reap

The legalization of cannabis means accepting it as a legal commodity of which can be involved in trade activities and contribute to a region's income. A majority of income able to be raked in by the local government which regions imply the liberalization of marijuana originates from taxes. 

Seven of the eleven states that have legalized recreational uses of ganja proceeded to tax their hash and they have taxed the plant 10-37% higher than local sales taxes. These sky-high taxes result in millions of Benjamins raked in by the state government. For instance, Washington and Carolina both made gargantuan incomes coming in at $319 million and $300 million respectively.

To put the fortunes gained from these plants into perspective, Pueblo County, a dying region in Colorado, managed to revive their moribund economy by 2014 when the cannabis industry was introduced. By making a hefty investment of $23 million for initial groundwork, Pueblo was able to acquire around $58 million in 2016, resulting in an economic impact of around $35 million. The cannabis industry in Pueblo was predicted to reap $100 million in the next 3 years.

A true projection of the great riches of which cannabis can pull in can be projected by assessing its true home-- the black market. The marijuana black market is the manifestation of utopia for blunt-smokers seeking for their heavenly escape, though illegally. 

By legalizing marijuana and accepting it as a commodity, it is to be expected that the tax revenue acquired from the sales of hash in the black market can be assumed to be part of the region's revenue. 

To convey the true size of the weed black market, a $46 billion valuation has been projected for the North American black market in 2016. That translates to (using 2005 black market data) $2,4 billion worth of tax revenue assuming equal tax rates as other goods and $6,2 billion  worth of tax revenue assuming tax rates equal to tobacco and alcohol (Jeffrey A Miron, 2005).

Legalizing a previously illegal commodity acquaints  the abolishment of costs prior needed to enforce the law. These national costs to enforce the legal status of marijuana can be dichotomized into three components: police expenditure, prosecutorial and judicial expenditure, and correctional expenditure. 

Police expenditure takes into account the total amount of monetary resources required to carry out a standalone drug arrest. Prosecutorial and judicial expenditure includes all of the monetary costs exerted during felony convictions carried out in state courts regarding drug violations. 

Finally, correctional expenditure accounts for the total money spent on the total amount of criminals incarcerated due to drug violations. Alleviating these financial burdens would save the government around $7,7 billion per year as these enforcement costs are not of any more use due to ganja's legalization (Jeffrey A Miron, 2005).

Mass production translates to mass employment as the cannabis industry has been contributing greatly to the nation's job creation progress. The intoxicating herb industry has been able to birth 211.000 direct jobs in the USA up until 2019. 

It should be kept in mind that only a portion of the states in the USA have cannabis as a legal commodity. That number increases again to around 300.000 if indirect jobs are to be accounted for. In 2018, 64.000 new jobs have been opened by the weed industry with projections of 20.000 new jobs to be birthed out this year in Florida and California alone. 

The jobs which are generated aren't only sublime in quantity but also quality as high-skilled, professional, and technical jobs make up more than half of the jobs created by the industry. This translates to a high wage median (as higher skill generally means higher wages) which reached $58,511, a higher median than the national median.

Being a tropical archipelago with soil abundant with nutrients, to say that Indonesia's ganja potential is impressive is an understatement. It has been said that the country's weed quality is amongst the best in the world. Quantity is also not a constraint as the country's copious amount of weed growing proves. On November 11th 2019, police found 419946 marijuana plants growing across a 7 hectare field in North Sumatra. 

The total value of the hash found in the spacious land, which was later terminated, was estimated to be around Rp52,5 billion. Scrutinizing ganja's prevalence nationally also shows similar results as last year alone 511 thousand cannabis plants were eliminated. Those numbers illustrate the sheer amount of Indonesia's hash inventory that if legal could have produced monstrous amounts of cash. 

The pristine quality of weed could also translate to soaring amounts of demand both nationally or internationally. Therefore, it is safe to say that assumptions of aforementioned economic benefits able to be acquired by the US may also be reaped by our archipelago if legalization was a reality.

To Soar or To Stay Grounded

The penultimate decision as to allow the shackles to be completely removed for the devil's lettuce or to enhance the strength of those shackles in this beloved archipelago is yet to be answered. It is of high importance to keep in mind that the prior analysis regarding the cost and benefit comparison of the unlikely legalization of marijuana is only done in regards to the economic spectrum. 

Though quintessential, a plethora of other considerations must be taken into consideration when considering an alteration in the national legal constitution regarding this sinful substance. It is up to the political elites whether they decide that the risks of grasping the mind-altering economic fantasies are greater than the potential financial utopia it beholds or not. To fly, or not to fly is indeed the question.

References without hyperlinks
Cannabis in Indonesia Patterns in consumption, production, and policies. (2016). Cannabis in Indonesia Patterns in Consumption, Production, and Policies.

Economic and Social Costs of Legalized Marijuana. (2018). Economic and Social Costs of Legalized Marijuana.

Egan, D., & Miron, J. A. (2006). The Budgetary Implications of Marijuana Prohibition. Pot Politics, 17--39. doi: 10.1093/acprof:oso/9780195188028.003.0002

Meadows, W. J. (2019). Cannabis Legalization: Dealing with the Black Market. SSRN Electronic Journal. doi: 10.2139/ssrn.3454635

The Marijuana Policy Impact on Labor Productivity. (2017). The Marijuana Policy Impact on Labor Productivity. doi: 10.13140/RG.2.2.13913.01125