The new law aims to legalize and collect taxes on exercising marijuana, will that be sufficient to correct the negative externality?


In the Canadian history, there has been a long debate and a lack of consensus on the legal status of cannabis. Since 1997, public opinion polls have found an increasing percentage of citizens believe “smoking marijuana should not be a criminal offence”. The newly elected liberal party of Canada addressed the issue with cannabis by stating “We will legalize, regulate, and restrict access to marijuana.” The Liberal Party removed the marijuana consumption and incidental possession from the Criminal Code. They promised to create stronger laws and focus on punishing more severely on those who provide marijuana to minors or sell it outside the new regulatory framework. New and appropriate federal and provincial excise taxes will also be applied on Marijuana. This is a huge leap from Canada’s traditional law of strictly prohibiting marijuana. The Liberal Party will face many obstacles when implementing this policy. In this paper, I will use normative and positive analysis to access the government intervention on legalizing marijuana. I will compare the new policy with the old one for fairness and effectiveness. I will also look into how the two policy affect different key stakeholders like special interest parties and consumers. Recommendation will be given after the analysis to either mitigate implementation risk or adjust policy.

Government Intervention

Normative Analysis

The Liberal Party believes Canada’s previous prohibition of marijuana did not prevent young people from using it, instead, it puts too many young Canadians into the criminal justice

system for minor offences. At the same time, it increased the cost of prosecuting those petty crimes. A normative comparison of the new policy with traditional policy will be made to access effectives. What should the government do to act in best interested of society. Under the traditional law, prohibit marijuana has led to a market failure. Some ineffectiveness comes from consuming marijuana led to impaired driving and car accidents and a large illegal market for selling marijuana. How much taxes has it gained and how much has it spend on prosecuting illegal marijuana’s? The new law aims to legalize and collect taxes on exercising marijuana, will that be sufficient to correct the negative externality? Will the taxes be low enough to turn people away from black markets? How will the pot industry change under the new relaxing policy? Another comparisons will be made for the fairness of the two policy. The tradition law punishes almost everyone who comes into contact with marijuana while the new law puts more focus on the ones that sell marijuana to the minors. By putting myself in different key stakeholders point of view, I will evaluate which one is for fair for young Canadians, marijuana consumers, sellers and the society. Colorado is one of the four cities in the United States that legalized marijuana. A brief comparison of Liberal’s policy and Colorado’s will be made to gather the effectiveness and fairness in an international standpoint.

Positive Analysis

It seems a majority of Canadians believe the government should relax the cannabis regulation. This section will focus on the public opinion poll to see what the government ought to do when dealing with marijuana. Legalized marijuana could change Canadian cities in different ways for the province has a say in determine how much tax they choose to exercise. Will the

new law be favored by majority of Canadians or will it cause public outrage.

This section will also discuss to what extent does the lobbyists have affected the liberal government’s decision. Bloc Pot, a Quebec pro-marijuana party also a major contributor to the Liberal Party, has seen their dreams of legalizing marijuana coming true. What are the strengths and weakness of this party and how will they benefit the society will be discussed in greater detail. There are also parties who strongly oppose to normalize marijuana. The Canadian chapter of Smart Approach to Marijuana is looking to push back on the pro-marijuana crowd. A detailed reasoning and their strengths and weakness will also be discussed in greater detail in this paper.


After the two analysis, I will gain a better understanding of whether legalizing marijuana will have more benefit or costs on society. If greater benefits are added to society, I will give out recommendations to the Liberal party on how to mitigate public outrage on those who are opposing to the law. If the analysis favors the traditional law, I will give out recommendations on what specific measures the Liberal Party can input on marijuana to exercise a stricter law.

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