High taxes

WHEN news came out that Malaysia was considering legalising medicinal marijuana, some may have thought it was a misprint. But no. Discussions are ongoing whether to legalise the use of marijuana for medical reasons.

There is a lot of conjecture over the medicinal benefits of marijuana. In the United States, the Food and Drug Administration has not agreed with the use of marijuana for medicinal use. But it did not ban it either, which has not given rise to the use of marijuana in 31 states. There are other countries joining in the wave, with Canada leading the way when it comes to at least companies investing in medicinal marijuana.

Business in selling marijuana is big in Canada. It was reported that sales of medicinal marijuana last year was estimated to be around US$600mil and growth is expected to increase further in the years ahead. Canopy Growth Corp is a Canadian company that was last traded at C$64.30. Two years ago, its shares were under C$2 a share.

But in the US, the first city to legalise medicinal marijuana was California. The state reportedly collected US $61mil in taxes in the first quarter. Denver, Colorado where medicinal marijuana is legalised, collected US $1.5bil in sales of medical and recreational cannabis and the state collected US $247mil in taxes and fee revenue from marijuana sales last year.

The numbers show that apart from medicinal use, marijuana is big money for countries, states and cities that have legalised it. That also explains why Thailand is trying to legalise medicinal marijuana and the race is on in South-East Asia to legalise cannabis for medicinal use.

The danger in the cash grab is that there are other dangers to consider. Illicit drug use in Malaysia is a problem that does not seem to go away and by legalising even medicinal marijuana, there is a risk that exposure to that may rise, given the propensity to cheat in trying to get such a drug.

Vigilance and control needs to be tight in dispensing marijuana for medical reasons and should the government allow the use of medicinal marijuana, you can bet the rush to set up a shop to sell marijuana will certainly cause a buzz in the market.