Cannabis Legalisation in North America

Many places overseas are legalising cannabis, including Canada, 21 states in the USA, Thailand, and Uruguay.¹

But what does this mean, and what are the impacts so far?

What is legalisation?

Legalisation is when a drug is legal to use, buy or sell and regulated by the government. In Australia this includes alcohol and cigarettes.

And some drugs are legal - but only with a prescription, such as oxycodone or benzodiazepines.

Possessing cannabis (without a prescription) remains illegal in Australia, except in the ACT and SA.^{2, 3} These states have decriminalisation policies in place.

Decriminalisation removes the penalty for personal use of small amounts of cannabis, but it remains illegal to buy or sell.

In the countries where cannabis is now legal, you can buy it without a prescription for recreational use.

Here we look at some of the impacts of cannabis legalisation in North America.

What are the economic impacts of legalisation?

Legalisation can reduce law enforcement costs and increase tax revenue for the government.

In the state of Washington, where cannabis is legal:

• tax revenue totaled $395 million USD in 2019
• 243,000 full time jobs were supported by the cannabis industry in 2020.⁴

While in Australia, law enforcement costs related to cannabis came to $2.4 billion in 2015-16.⁵

The illegal cannabis market also funds organised crime networks and other criminal activity.⁶

Under a legal model, part of the revenue could go toward supporting public services instead.

What are the health impacts?

Legalisation means cannabis products are regulated, so people can access safe products, instead of black-market cannabis that may contain harmful toxins.⁵

While there hasn’t been a significant increase in cannabis use or cannabis-related harms due to legalisation in parts of North America, we’re still unsure of the long-term impacts. ^{5, 9, 10}

We know that the risk of harmful use has remained stable in Canada. But in Colorado, an increase in cannabis-related hospital presentations was seen after legalisation.^{7, 9}

The majority of harms come from cannabis impaired driving, and substance use disorders.¹⁷

Following legalisation in parts of the US, there has been an increase in accidents involving a driver who was cannabis impaired.¹⁸

Studies also found lower-socioeconomic areas in Canada have greater access to shops selling cannabis. This may lead to increased harms for these areas, as being closer to shops is associated with more frequent use.¹¹

Cannabis legalisation and young people

There are some concerns legalisation may increase use by young people.

Cannabis use during adolescence and young adulthood can increase the risk of:

• cannabis dependence
• schizophrenia/psychosis
• anxiety
• depression
• cognitive impairment
• decreased learning capabilities.¹²

But legalisation in Canada and Uruguay hasn’t led to significant changes in teen use.^13-15

There are some findings in the US that use by young adults has increased post legalisation, but results for teens are often mixed.¹⁶

Unintended consequences

There are lessons to be drawn from the North American experience of legalisation.

While taxing products can increase government revenue, it can also set prices high. This may mean people choose to purchase cannabis illegally.¹⁹

In Canada, the average legal price was 48% higher than illegal cannabis in 2019, and in 2021 it remained 18% higher.⁹ The main reason people continue to buy from the black-market is because it’s cheaper.^{9, 10}

There’s also been issues with regulating the THC content in legal products, which produces the psychoactive effects and makes a person ‘high’.

In Canada there was an increase in high-strength legal cannabis edibles. To address this, a THC tax on edible products was introduced to incentivise lower potency products.^{21, 22}

Cannabis in Australia

Despite remaining illegal for recreational use, cannabis is widely used in Australia.

In 2019:

• 36% of people had used cannabis at least once in their life
• 11.6% had used it in the past 12 months²³
• use in Australia was 8% higher than the global average.¹⁷

Even though medical cannabis is legal, many people still source their medical products illegally.

In 2020, 62% of survey respondents bought their medicinal cannabis illegally, primarily due to high costs.²⁴

In 2019, 42% of Australians supported legalisation, and only 22% thought possessing cannabis should be a criminal offence.²⁵

Recently, a 2023 survey of 9,000 Australians found that 98% support legalising cannabis.²⁶

The Greens are about to introduce legislation aiming to legalise cannabis nationally.

If the legislation passes, recreational cannabis would become legal across Australia – however government support is needed for the bill to be approved.²⁷

To read more:

• Medicinal and recreational cannabis vs synthetics: what’s the difference?
• Cannabis use and young people
• Accessing medicinal cannabis