| The 400 block of Douglasbank Court is similar to Calgary's seemingly endless suburban neighbourhoods in many ways – large houses, wide streets and, until recently, a huge marijuana growing operation inside one of the homes.
On August 27, in the middle of a cloudy afternoon, city cops executed a search warrant on a home on the street and discovered 739 marijuana plants in a "sophisticated three-stage marijuana dirt grow operation," according to a press release issued by city cops after the bust.
That press release was the latest in a never-ending stream of reports heralding pot busts by city police. And like most of those reports, the release included the requisite estimate of the street value of the apprehended contraband: in this case, $1,034,600. It would be a staggering figure if such reports weren't so common.
In fact, they are so common that by July, cops said they had confiscated $30 million in illegal pot throughout the year, and, with some extrapolating arithmetic, one cop told the Calgary Herald that the city's marijuana industry is now worth, conservatively, $1 billion a year.
That is a staggering figure. The City of Calgary's entire operating budget is $1.5 billion. The Calgary Police Service's budget is only about $150 million.
Historically, the economic value of the weed has never been given much thought by anyone not carrying a badge. But many people say police estimates are far from reality, and as marijuana moves closer to the mainstream and the federal government talks of decriminalizing small amounts, the plant is becoming an important part of the country's economy. But just how important?
Unlike most parts of the economy, determining the value and economic impact of the marijuana trade isn't an easy task. Estimates of the value of pot countrywide range wildly – most of them fall between $7 billion and $14 billion – and figuring out the local value is even tougher. University of Calgary economist Frank Atkins laughs heartily when I ask him the value of the city's pot business.
"I have no idea," he says. "There would appear to be no reliable way to measure it."
Like any black market good, the marijuana trade is conducted almost exclusively in off-the-books cash. Atkins says economists guess the value of such industries by estimating the real value of economic activity in the country and comparing it to the total reported for tax purposes. Some estimates peg the value of the black market as high as 25 per cent of the country's entire gross domestic product, but that includes all illegal activity as well as off-the-record barter exchanges between friends, not just the marijuana trade. And Atkins won't even throw his name behind that figure because he questions its accuracy.
So I ask if the police's estimate of $1 billion sounds reasonable. He laughs even louder than before.
"That's crazy," he says. "That sounds very high. My gut feeling is that $1 billion is very big. But really, I have no idea."
Next stop: Canada's self-declared Prince of Pot – B.C. Marijuana Party leader Marc Emery. I track down Emery's cellphone number and catch him as he is boarding a plane en route to being arrested. He's in the middle of his Summer of Legalization tour, which is his attempt at being busted for smoking joints on the steps of police headquarters in cities all across Canada so he can challenge the country's marijuana laws in court. By the end of the summer, he succeeds in Edmonton, Calgary, Winnipeg, Regina, St. John’s and Moncton, according to his website, but fails in several Ontario cities (despite smoking "massive phatties in front of police stations in Kingston, London, Hamilton, Windsor and Sudbury").
Luckily, Emery is a bit of an expert in this field. He recently toted a National Post Business magazine reporter around answering similar questions, so he rattles off statistics and makes guesstimations so quickly my pen can barely keep up.
Like the Ph.D. economist Atkins, the Prince of Pot scoffs at Calgary cops' billion-dollar estimate. But Emery isn't shy about making his own estimations.
Emery puts the B.C. pot industry at about $4.2 billion. He estimates the average grow operation generates $60,000 a year of product, which means B.C. is home to roughly 70,000 grow operations. He says Alberta likely has a smaller concentration of grow ops (compared to B.C., that's a safe bet) and, considering its smaller population, he estimates about 20,000 operations provincewide. Total: $1.2 billion – of which Calgary likely has less than half.
"It would certainly be credible to be in the $500-million range," Emery says. "It seems plausible. It seems more people are growing in rural areas, but the highest concentration is obviously in cities."
I then check in with Tim Person of the 17th Avenue S.W. hemp store Hemporium. Person says he's never really done the math, but has put some thought into the question, so I pull out a calculator and we start crunching numbers.
He guesses, based on his knowledge of the scene and the city's population, that Calgary is home to roughly 325,000 marijuana smokers, who toke an average of four grams a week, which costs, roughly, $35. That means Calgarians fork out about $11.3 million a week for weed, which totals $591 million per year. This comes remarkably close to Emery's estimate.
But Atkins warned me earlier: beware of the estimates of cops and pot smokers.
"The police have a vested interest in making (the industry) look very large because it makes them look like they're doing their job, and the Marijuana Party also has an interest because they want to see everybody (permitted to) smoke pot," Atkins points out.
So an independent third-party expert is needed to verify those figures.
Unfortunately, there doesn't seem to be any such expert. Anyone with enough information to speculate seems to be a pot smoker, and even though they, as a group, seem keen to share their insight, they aren't exactly independent.
Organized crime is undoubtedly a major player in the country's marijuana trade – if not the largest – but the Hell's Angels haven't shown much willingness to open their books in the past, and probably can't be considered a group of impartial economic analysts, either.
So, I seem to have hit the same wall as everybody else who is trying to put a value on the marijuana trade. I guess there's a reason the black market is so named.
If we're to make an unscientific guess based on the information received so far, we can take the estimates from Emery and Person, and reasonably round them down based on Atkins's warning, and say Calgary's marijuana trade is worth somewhere between $350 million and $500 million annually, which is roughly equal to the amount it costs to run the University of Calgary each year, to downtown office sales in 2002, or to the entire North American elk industry, according to the North American Elk Breeders Association.
That number is also equal to another interesting statistic – this one from the auditor general of Canada, Sheila Fraser, that brings up a whole range of other questions about the value and costs of drug prohibition and the choices Canadian society has made about drug use.
"Eleven federal departments and agencies are involved in the effort to control illicit drugs at a cost of about $500 million a year," Fraser said recently in a press release. "But they don't know the extent of the problem and whether or not they are succeeding in their efforts." |
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