First, this paper estimates the dimensions of the market for cannabis in Spain using data on the extent of consumption and the main patterns of use of consumers. Then the paper reviews the hypothetical production and distribution costs of these drugs in different production regimes under different legal conditions. The review shows that current prices of cannabis in the illegal market could be notably reduced if production and distribution of cannabis were decriminalized and even more if they were performed by legal enterprises. Thirdly, we examine the relationship between prices and consumption levels by analysing the price elasticity of demand. A fall in the prices of cannabis products will likely result in an increase in the number of users and in the total amount consumed. Lastly we consider several alternatives for the taxation of cannabis derivatives to counteract the likely fall in prices, and their pros and cons.
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| http://dx.doi.org/10.20882/adicciones.807 | DOI Listing |
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