Australia to Legalise Cannabis For Personal Use?

Summer 2011.

Retiree Alicia Castilla was busy watering her garden when Uruguayan police stormed into her property and arrested her.

The police then proceeded to confiscate much of her property.  This included the plants she had been watering only minutes before.

You see, those were cannabis plants.

Castilla, who had back then retired in Uruguay, was also the author of popular book Cultura Cannabis (Spanish for cannabis culture). The book explores the way cannabis has affected societies during history.

Castilla claimed she was growing the plants for personal use, and for research for her books. The retiree was now facing jail time for growing marijuana.

Uruguay is a small and progressive country in South America.

Back in 2011, they had quite an open mind in regards to marijuana. Their law did not criminalise the use of marijuana for personal consumption. Yet, while personal consumption was allowed, cultivation and sales were forbidden.

And this was the problem.

You could consume cannabis, but it wasn’t clear how you were supposed to get it.

It meant that anyone wanting to access marijuana for personal consumption needed to resort to the illegal market…or grow it illegally, as Castilla did.

Castilla´s arrest shocked and rallied Uruguayans.

While Uruguay had already been exploring the legalisation of marijuana, Castilla’s case brought the whole issue into the light, and sped up legalisation.

In 2013, Uruguay became the first country in the world to regulate non-medical cannabis.

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Now Australia could be on the same path

In 2016, Australia legalised medicinal cannabis. Now the Australian Capital Territory (ACT) is looking at a bill to legalise cannabis for personal use.

The problem is that while ACT may pass the bill, it would still be illegal at the federal level.

From the Canberra Times:

Canberra has every right to legalise cannabis, and the federal government would be ill-advised to try and overturn such a law, according to a prominent barrister.

‘Greg Barnes, who is national president of the Australian Lawyers Alliance, said a bill being introduced in the ACT Legislative Assembly this week that would make small amounts of cannabis for personal use legal would not be in contravention of federal drug laws.

‘“Legalising cannabis is something that is well within the jurisdiction of states and territories,” he said.

‘“They have responsibility for drug policy, as does the Commonwealth, but there is nothing stopping, in my view, the legalisation of any drug in a state or territory.”[…]

‘Although the ACT has a history of enacting laws that are then overturned by the Commonwealth – gay marriage and euthanasia being two prominent examples – Mr Barns said drug laws were different.

‘“This is an area where the Commonwealth and states and territories all have jurisdiction, so it’s not like gay marriage where the argument was only the Commonwealth had jurisdiction,” he said.

‘“It would [be] extremely stupid for a federal government to try and overturn a law which is simply bringing the ACT into line with 11 American states, Canada, a number of South American countries and in Europe.”’

We are seeing something similar in the US. While medicinal and recreational cannabis is legal in several states, it is still classified as a Schedule I drug at the federal level, along with heroin and LSD.

And, increasingly, more US states are legalising marijuana. They don’t want to lose out on revenues.

Yet, as the article noted, ACT could be facing a similar dilemma to Uruguay.

NU health law expert Thomas Faunce agreed that there was still much to discuss about the practicalities of the bill.

“My concern is where do you get the plants? Because even if you can grow your own, do you actually have to go to criminals to get the seed?” he said.

But ACT passing the bill could mean that it doesn’t stop there. We could be seeing a whole new industry starting from scratch in Australia.

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From the Mailbag

You may remember a little while back we run a poll among readers.

We asked, ‘if you had $10 million to invest and you could only either put it on crypto or cannabis, which one would you choose?’

Well, we have the results. And while the majority chose cannabis…let me tell you, it was a close call.

Here are some of the answers we got from readers:

Hi Selva, At first I was thinking about 50/50, but when it comes to choose only one I have to go for cannabis. My reasoning is as follows: crypto seemed to have settled down after the hype (for now) and although cannabis looks similar, at the moment there are ongoing developments within the cannabis industry and legalisation on a worldwide scale. From what I’ve read so far about crypto I do believe this will revive and possibly be the new global currency in the future.

Hi, if I had US$10m to invest I would put it all in cryptos… I also have shares in cannabis that are doing OK, but I like the excitement of cryptos.

I get crypto but still a bit nervous about it…you can see and touch cannabis so its a bit easier to understand?…in fact that is probably why most people vote for cannabis…they are following one of Warren Buffet’s rules – “dont invest in anything you can’t understand”

‘Hi Selva, I would have to vote for Cannabis because: I don’t clearly understand the benefits and the potential size of market for cryptos, but there are a lot more stats (quantifiable) on the potential size of the cannabis market.’

Thank you to everyone that has written in. As always, it is a pleasure to hear from you.

Remember, you can always reach me at cs@portphillippublishing.com.au.

Best,

Selva Freigedo,
Editor, Markets & Money


Selva Freigedo is an analyst with a background in financial economics. Born and raised in Argentina, she has also lived in Brazil, the US and Spain. She has seen economic troubles firsthand, from economic booms to collapses and the ravaging effects of hyperinflation, high unemployment, deposit freezes and debt default. Selva now writes from her vantage point here in Australia. She is lead Editor at the daily e-letter Markets & Money. And every week, she goes through each report and research note produced by our global network of trusted advisors to find the best investment opportunities for you in Australia and overseas. She packages these opportunities for you in Global Investor.


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