Study Finds That Cannabis Legalization Could “Stabilize Finland’s GDP”
As the emerging legal cannabis industry continues to spread throughout Europe, one nation that is a bit of a holdout is Finland. Cannabis is not a new thing in Finland, as demonstrated by pollen samples found in Sakinlampi in 1994 that were dated to as far back as 4,000 B.C.
However, cannabis is currently prohibited in Finland outside of very limited medical cannabis use. A researcher affiliated with the Metropolia University of Applied Sciences recently analyzed the potential economic, societal, and fiscal impacts that cannabis legalization may have on Finland. The researcher’s findings were published on the academic database Thesus.
“This thesis will dive into the economic, societal and fiscal impact of the legalisation of Cannabis in the Nordic country of Finland.” wrote the study’s author, Jay Desilva. “By looking into other countries with similar economic, environmental, and societal aspects that have already gone through the process of legalisation, such as Canada, Thailand, and Uruguay…we can identify the trends that occurred after the legalisation process as well as the different structures implemented in order to regulate the negative effects of cannabis legalisation.”
Cannabis is currently legal at a national level for adult use in Uruguay, Canada, Malta, Luxembourg, Germany, and South Africa. Thailand has also adopted a national measure that somewhat legalized cannabis, two dozen states in the U.S. have adopted recreational cannabis measures, and regional adult-use cannabis commerce pilot trials are operating in the Netherlands and Switzerland.
The researcher in Finland analyzed “the important aspects of the economy,” such as Finland’s GDP and unemployment rate. Mr. Desilva also determined that “since Finland is a country with a cold climate for most of the year, the method of cultivation used would most likely have to be indoors,” which is not the case in some of the nations used as comparators in the analysis.
Mr. Desilva pointed out that “Uruguay has no specific excise tax on Cannabis as it’s trying to keep prices competitive with the black market” and that a corporate income tax “is applied at a rate of 25% for producers.” The researcher surmised that “a similar structure could be applied for Finland with an additional VAT applied on consumers,” which would “be viable as the cost of production is low,” and that such a tax proposal “would still keep prices competitive with the black market.”
“Economically, shifting the cannabis market from the unregulated black market to a regulated legal industry could stabilize Finland’s GDP as all the other countries who have done have seen a substantial increase in their GDP in the years following their legalisation,” the researcher found. “The taxation model suggested and used by Canada and Uruguay demonstrates how governments can effectively regulate pricing and safe cultivating methods, while keeping the legal market competitive against illicit trade.”
“Furthermore, Finland’s unique position and commitment to renewable energy could position the country as a leader in sustainable cannabis production.” Mr. Desilva added.
“The results of this research paper have found that the legalisation of Cannabis provides a substantial potential benefit for Finland as it would open up a whole new industry as well as economically the tax revenue gained from this new industry would be used to tackle the limited negative impact that legalisation would have on society as well as potential help tackle other societal challenges Finland faces such as overconsumption of alcohol.” the study’s author concluded.
At the recent International Cannabis Business Conference in Berlin, leading international cannabis economist Beau Whitney, founder of Whitney Economics, estimated that the potential global medical and adult-use cannabis market is roughly $237.8 billion, in addition to his projected value of the global industrial hemp industry of $456.2 billion.