It’s Time to Legalize Marijuana in Georgia:

Economic benefits of cannabis legalization

Maria Darchievi

Adviser: Andro Gigauri

September 2017

Tbilisi, Georgia

2
Contents

1. Introduction...............……………………………………………………..………………................................…..….. 4
2. Methodology and Limitations..........…………........…………………………………………………………………….. 4
3. Background of the Issue………………………………………………………………………………............................. 5
3.1. Past and Current Directions in Georgia’s Drug Policy............................................................. 5
3.2. Georgia’s War on Drugs and its Victims. Drug Policy Reform Activists................................... 5
3.3. Outcomes and Reactions........................................................................................................ 6
4. Description of the Problem………………………….………………………….…………………………………………….... 7
4.1. “Prescription Drug Abuse”....................................................................................................... 8
4.2. Intravenous Drug Use and Related Diseases........................................................................... 8
4.3. Unnecessary Budget Expenses................................................................................................ 8
4.4. Enrichment Mechanism and Police Pressure.......................................................................... 9
4.5. Crime and Corruption............................................................................................................. 9
4.6. Challenges Drug Users Face and Stigma of Addiction............................................................... 9
5. Policy Options………………………………………….………………………………………................….…………..…….. 10
5.1. Status Quo is not the Option................................................................................................... 10
5.2. The Decriminalization Option................................................................................................. 11
5.3. Legalization as the Alternative Solution................................................................................. 13
6. Recommendations and Conclusion………………………….…………………………………………………………….. 17
7. Work Cited.………………………………………………………….……………………………………………………............... 18

3
1. Introduction

To legalize or not legalize marijuana1 has been a subject of debate in developed countries for many years.

Supporters say cannabis legalization reduces crime, decreases costly enforcement and incarceration expenses,
raises tax revenue, and stimulates the economy. Opponents insist that cannabis legalization increases
consumption and leads to addiction, harms public health, increases violent crime, and decreases work
performance. Ultimately the legalization of marijuana remains as the most controversial topic in many
countries of the world.

Current drug policy in Georgia needs to be reconsidered and changed. Because of strict anti-drug policies in
Georgia marijuana consumers permanently face repressions, illegal arrests, long prison sentences, and
stigmatization. During last years local activists have achieved some positive changes in the field of drug policy
reform and public opinion; however, the problem remains topical in Georgia.

Georgia presents an interesting case for studying the cannabis legalization. Being the former Soviet republic,
during last twelve years, Georgia has made great strides in modernizing its policy, economy and the social
sphere. This included reforms of the police, healthcare, and tourism. In case of drug policy reform and cannabis
legalization, Georgia’s case will be unique in South Caucasus region and among the former-Soviet states.

This study argues that the existing drug policy needs a reform and as an alternative offers the legalization of
marijuana. The paper focuses on the economic benefits of legalizing marijuana. It presents economic
arguments in favor of cannabis legalization based on research and analyses. The paper concludes by offering
policy recommendations for the issue and can be useful to Georgian policymakers and government officials.

The paper is organized as follows. Chapter 2 presents the methodology used during the study and limitations of
the study. Chapter 3 provides the background of the issue highlighting the main events and cases. Chapter 4
gives a detailed description of the policy problem using facts and statistics. Chapter 5 presents policy options
and the alternative solution - cannabis legalization and discusses possible economic impacts and benefits.
Finally, Chapter 6 concludes and offers specific recommendations.

2. Methodology and Limitations

This study uses three research methods. It includes qualitative content analysis of drug legislation, existing
research, reports by Georgia’s government and non-governmental organizations, and comparative analysis.

Additionally, in-depth interviews have been conducted with the representatives of political and non-
governmental organizations related or working on the issue. Among the respondents are Zurab Japaridze (a
leader of the New Political Centre - Girchi) and representatives of the White Noise Movement (which advocates
drug decriminalization in Georgia), two marijuana regular users, and one participant of methadone substitution
therapy program (due to ethical considerations they are not named). Some potential respondents either
refused to participate in in-depth interviews (Sector Economy and Economic Policy Committee at the
Parliament of Georgia) or ignored the request (political parties The Alliance of Patriots of Georgia and Georgian
Dream-Democratic Georgia). The study uses previous interviews of some of them published by mass media.

Although the study has reached its aims, there were some unavoidable limitations.

The main limitation is non-existence of exact statistics on drug addiction in Georgia because drug addicts don’t
state publicly their addiction. No general population survey has ever been conducted in Georgia due to lack of
funding, nor do the national authorities plan one for the foreseeable future. A number of cannabis users in this
study is partly accurate, based on existing data and information.


1
"Marijuana" and "Cannabis" are used to refer to the same plant. Cannabis is the scientific name for the entire plant hemp. Marijuana is a name
for the cannabis plant and more specifically a drug preparation from it.
4
3. Background of the Issue

3.1. Past and Current Directions in Georgia’s Drug Policy

After dissolution of the USSR drug policy in Georgia has changed several times.

During president Shevardnadze (1995-2003), after chaotic 1990’s, a certain order was established in Georgia.
Illegal drugs were available on market, a rather repressive criminal code was in force, but the government kept
ignoring the issue and didn’t attend to it much.

Under President Saakashvili (2004-2013) drug policy took an even more repressive edge. Saakashvili amended
several articles of the Criminal Code2 and declared war against drugs and zero-tolerance for its users3. It was
illegal to use or own any amount of drugs. People were imprisoned for marijuana and heroin equally in
accordance with one article of the criminal code. Young drug users were convicted as well as elder ones. That
was the time when a group of activists striving to humanize the repressive drug policy established the Georgian
Drug Users Community Group (GeNPUD).

Since 2005, during Saakashvili presidency, methadone substitution therapy program was launched. The
program is still active and it became free for all patients since summer 2017. It operates under Centre for
Mental Health and Prevention of Addiction.

After another transition of power, when Giorgi Margvelashvili was elected as the head of the country (2013 -
present), the drug-related repressions and a nearly literal hunt on drug users have halted. By the end of the
first year of his presidency number of people arrested for drug crimes halved. Same old repressive law,
introduced by Saakashvili is still in force and serves as a weapon in hands of the government and the police,
which makes the local drug policy one of the most repressive ones in the world.

3.2. Georgia’s War on Drugs and its Victims. Drug Policy Reform Activists

In Georgia, War on Drugs continued and had its victims.

The most sensational was the case of artist Beka Tsikarishvili. In 2013, the police caught him with 65 grams of
marijuana and threatened him with 6-8 years in prison.

The White Noise Movement, which advocates drug decriminalization in Georgia, started with Beka's case. The
movement launched an information campaign under the slogan "Beka is not a criminal!" and the story received
wide public attention. It became obvious to society that there is something wrong with a drug policy in Georgia
and there is a war with people who are not criminals and are not harming anyone. Beka was released on bail.

No less sensational are the tragic cases of Levan Abzianidze and Demur Sturua4.

50-year-old Levan Abzianidze from Kutaisi was stopped by police and asked to do the urine test. He refused
and was taken to the police station. Due to pressure problems, he could not urinate, so he was given diuretics
(which affect blood pressure), did the test and was released. On the way home, Levan died in the street.
Despite the official investigation response that the diuretics were not at fault, activists believe that Levan is a
victim of drug policy.

22-year-old Demur Sturua from Western Georgia committed suicide, leaving a suicide note. In the note, it was
said that the local policeman threatened him with arrest and reprisal aiming to gain information about people
in the village suspected of growing marijuana.

2
Criminal Code of Georgia, Articles №260 and №273.
3
During his annual report presentation in the Parliament of Georgia, Feb 14, 2007.
4
Information based on the interview with a representative of the White Noise Movement Davit Subeliani.
5
The White Noise Movement activists came to this city and held a rally in front of the police station. The police
arrested several activists, but this information quickly spread in the media and social networks, and the police
released all detainees.

The latest action was held recently in Tbilisi in June 2017, and was connected with two rap performers from the
Birzha-Mafia musical group. They released a music video depicting a police officer as a dog. It appeared
offensive to the police. Later, according to the White Noise Movement, as revenge, policemen have planted
drugs on Birzha-Mafia members and then detained them in Tbilisi and charged for illegally purchasing and
possession of drugs in an especially large amount. In the light of these events, the White Noise Movement
began a campaign to release members of the Birzha-Mafia members. They organized a mass action in front of
the Georgian Parliament building in support of the detainees. This story has gained a huge resonance in the
society and in some time singers were released on bail.

Besides campaigns and actions, the White Noise Movement provides detained people with legal assistance.
Movement activists organize watch-groups at drug testing checkpoints and educate citizens on their
constitutional rights.

3.3. Outcomes and Reactions

Key Dates:

October 2015
The White Noise Movement decided to appeal to the Constitutional Court of Georgia on Beka's case. Just in
few months, the Constitutional Court of Georgia declared unconstitutional the imprisonment for purchase and
keeping of marijuana for personal use. The court ruled that imposing such punishment qualifies as a torture,
cruel, inhuman, or degrading treatment. This historic verdict of the court let Beka avoid a prison sentence. In
the light of the precedent, hundreds of prisoners for the same charge were immediately released.

December 2016
Based on Georgia's Public Defender Ucha Nanuashvili's lawsuit the Constitutional Court of Georgia has declared
that imprisonment for use of small amount of marijuana, as well as imprisonment for its purchase, possession,
and production for personal use is unconstitutional.

July 2017
The Constitutional Court of Georgia declared unconstitutional the imprisonment for illegal sowing, growing,
and cultivation of cannabis up to 266 grams. Representatives of the White Noise Movement have lodged the
case to the Constitutional Court in December 2015 and February 2016.


In April 2016, the Georgian Drug Users Community Group (GeNPUD) established the National Platform for Drug
Policy. The platform brings together 41 entities representing NGOs providing services, other civil society
organizations, unions, research organizations, and drug user community groups.

The platform has worked on a bill draft with a proposal of carrying out drug policy methods throughout the
country, drug abuse prevention, replacement of imprisonment, and termination of drug testing in the street.
The activists strongly rely on Portuguese experiences with drug decriminalization, which focuses on a social
assistance system aimed at drug users.

The draft package in changing the law for the decriminalization of all drugs has been submitted to parliament
by the National Platform for Drug Policy and will be reviewed by the Parliament in the fall session of 2017.

Must be mentioned that in June 2017, a bill to reduce criminal penalties surrounding marijuana (initiated by
the Ministry of Justice) passed its first hearing in the Parliament of Georgia.

6
If the bill is adopted, the courts will no longer sentence people to prison for planting, cultivating, purchasing,
storing, and consuming marijuana in allowed amount for the first offense; even if the court issues a guilty
verdict, a person won’t be convicted.

For better efficiency of legislative reform, the National Platform for Drug Policy decided to search for friendly
politicians who would promote the ideas of the new drug policy in Georgia at the parliamentary level. Soon the
platform has started cooperation with the Healthcare and Social Issues Committee of the Parliament of
Georgia.

On the background of drug policy reform activism in June 2017, the Prime Minister of Georgia Giorgi
Kvirikashvili said the country's drug policy is overly harsh and needs liberalization. He urged parliament to
speed up work on this issue so that to adopt a modified, more humane, and model it on European marijuana
laws by the upcoming fall session.

During the same period, National Democratic Institute's (NDI) made a survey (June 18 - July 9, 2017)
throughout Georgia (excluding occupied territories) which shows that 57% of the population believes that
people should not be imprisoned for personal use of any type of narcotics.

Girchi’s initiatives and actions

The most ardent supporter of the drug policy reform in Georgia particularly of the cannabis legalization is Zurab
Japaridze, a leader of the New Political Centre - Girchi, former Member of Parliament.

In December 2016, on New Year's Eve, Japaridze held the cannabis planting public action in his office.
The process of planting marijuana seeds was live broadcasted. Girchi's office has been turned into a
greenhouse for 84 pots hosting cannabis breeds from all parts of the country. In 11 days, Georgia's Ministry of
Internal Affairs has launched an investigation on the illegal planting of cannabis. Police officers paid a visit to
Girchi's office and confiscated pots. The case ended with a court decision, which imposed a fine only on Zurab
Japaridze out of all 84 participants.

Later in February 2017, Girchi held another action in order to show to authorities how the prohibition of
marijuana cultivated in the country may force people to purchase serious harmful drugs that lead to addiction.
Recently some Georgian citizens started receiving text messages offering a sale of drugs. Girchi decided to
conduct an experiment and followed the instructions in the message. Within 40 minutes Zurab Japaridze has
bought 5 grams of synthetic cannabinoids (widely known as "Spice") paying 347 USD. The whole process was
live broadcasted. After purchasing Japaridze hand over the drug to the police.

The next initiative of Girchi, in March 2017, to hold a referendum on the cannabis legalization was rejected by
the Central Election Commission of Georgia (CEC)5. According to Japaridze, a decision to refuse registration was
made by the CEC’s collegium, consisting, in particular, of the members of political parties Christian
Conservative Party, Alliance of Patriots of Georgia, Movement for Liberty - European Georgia, United National
Movement, Georgian Dream - Democratic Georgia, and The Industry Will Save Georgia. Zurab Japaridze was
surprised by the fact that members of the collegium made a unanimous decision, however, earlier some of
them officially supported the initiative to hold a referendum on the legalization of marijuana.


4. Problem Description

As a result of strict drug policy in Georgia, some problems have been accumulated and have been negatively
influencing the health of drug users, making police officers abuse their power, causing government spending
and stimulating a black market.

The paper considers basic problems in detail.

5
CEC Order №17/2017, March 9, 2017.
7
4.1. “Prescription Drug Abuse”

Due to complexities of marijuana, addicts in Georgia used to buy combined therapeutic agents containing
Codeine, Ephedrine, Norephedrine, and Pseudoephedrine, which were legally imported to Georgia and were
freely available at pharmacies. These medications were used to make so-called “homemade drugs”: “Krokodil”,
“Vint” and “Jeff”. In March 2014 a package of legislative amendments, which has been initiated at the
Parliament of Georgia, entered into force. According to the legislative amendments, illicit traffic of medications
listed above has been subject to criminal prosecution, especially in regard to charging pharmacy owners and its
employees.

Then users proceeded to psychoactive substances, the so-called “bios” and “spices”, which were not legally
regulated and were smuggled into Georgia. Despite the law “On New Psychoactive Substances” which entered
into force on May 2014, Girchi's experiment shows that it's still available for anyone to purchase "bios" and
"spices".

Because of a marked reduction in the availability (and a subsequent increase in the price) of ‘traditional’ drugs
including marijuana, and as a result of existing drug ban many drug users proceed to new homemade
substances and synthetic cannabinoids that are very toxic and harmful for health.

4.2. Intravenous Drug Use and Related Diseases

According to Curatio International Foundation and Bemoni Public Union Study Report in 2014 estimated
number of Intravenous Drug Users in Georgia equals 49,700 and it makes 1,33% per general population.

Since 2007, the year when Georgia introduced its zero-tolerance policy the rate of intravenous drug use in
Georgia has almost doubled6.

Many drug addicts are afraid to buy new syringes and needles, as the police may detain them outside
drugstores. The syringe is still an attribute of illicit drug use and it's dangerous to have it with oneself.
The persons who use drugs intravenously and share needle/syringe are under the risk to get infected
with HIV and hepatitis C, as well as hepatitis B, sepsis, and malaria.

According to Infectious Diseases, AIDS and Clinical Immunology Research Center in Tbilisi, by September 2017
among registered 6564 HIV/AIDS cases in 43.2% infections are caused by intravenous drug use. According to
organization “New Vector” which implements hepatitis C elimination program, the persons who use drugs
intravenously have the highest index of infection - 70% out of all cases 7.

4.3. Unnecessary Budget Expenses

According to the White Noise Movement, an average of 112 people are drug screened every day.

The police in Georgia forced to make urine drug screen around 50,000 people in 2015. Only in 37% cases the
result of test was positive8.

According to Zurab Japaridze9 the state receives from citizens average 2 tons of urine in a year. Testing one liter
of urine costs around 6,000 Lari (2,400 USD). This means the state spends over 15 million Lari (6 million USD)
per year. In comparison with these costs, annual funding for Administration of the Government of Georgia
makes 17 million Lari, Presidential Administration of Georgia - 9,8 million Lari, State Audit Office of Georgia -
14,5 million Lari, and Office of Public Defender of Georgia - 4,5 million Lari.


6
“Opposition Mounts to Georgia’s War on Drugs” by Giorgi Lomsadze, Dec 12, 2016.
7
News Bulletin “Moambe”, Feb 24, 2017; http://1tv.ge/ge/news/view/151606.html
8
1TV, Merab Janiashvili, June 19, 2017; http://1tv.ge/projects/analytics/?page=detail&id=165868
9
Based on the interview with Zurab Japaridze, Sep 21, 2017.

8

Japaridze says the state spends 6,000 Lari for one-liter urine while 100% of the state grant per student is 2,250
Lari and state pension is 2,160 Lari per pensioner per year.

One of two existing methadone substitution therapy programs is funded by the state. According to Guram
Imnadze10, a legal analyst for Human Rights Education and Monitoring Center, the state spends 5 million Lari (2
million USD) on health programs for people with substance dependence while spending 15 million Lari annually
on drug testing. Imnadze says if most of that money were directed toward treatment, the drug situation in the
country would improve.

4.4. Enrichment Mechanism and Police Pressure

A previous government with its zero-tolerance policy turned the drug fines into an additional source of state
income. In 2007, according to Beckley Foundation’s Drug Policy Program 30 million Lari (12 million USD) was
paid into the state budget as drug-related fines, while only 250,000 Lari were allocated for drug prevention and
treatment (Otiashvili, Sárosi, and Somogyi, 2008). Instead of investing finances in better managing the illicit
drugs problem, the government has decided to make it a considerable source of state income.

According to psychologist Jana (Darejan) Javakhishvili11 the practice of urine drug test creates a self-destructive
system: it sustains itself, as the money received from the penalties covers costs caused by prohibition (e.g.
salaries of police officers who detain drug users), but does not bring sustainable results in prevention of
substance abuse. Referring to the research of organization Alternative Georgia Javakhisvili explains that in
2008, 43,000 people passed drug testing. 1/3 of those whose drug test result was positive returned to drugs in
three months after detention, and in 11 months all users without exception returned to drug use (Otiashvili,
2012).

Today, despite changes in the legislation and new constitutional norms, according to which there is no more
imprisonment for purchase and keeping of small amount (up to 100 gr) of marijuana for personal use, there are
still penalties for marijuana possession.

Police pressure weakened and police officers are now unable to threaten and scare detainee with
imprisonment, but the penalty for marijuana possession is 500 Lari (200 USD) and for income raising policemen
are planting synthetic drugs such as "bio". It makes penalty increase up to 2,000 Lari (800 USD).

4.5. Crime and Corruption

In conditions of strict drug policy crime and corruption are unavoidable.

The drug ban causes a deficit, a price increase, stimulates crime and a black market.

For example, prices of traditional illegal drugs indicated by the Ministry of Internal Affairs of Georgia in 2012
were approximately 250-285 Euro per one gram of heroin, 20-30 Euro per one gram of opium, 200-285 euro
per one 8mg pill of Subutex. In comparison, a single dose of homemade preparations of amphetamine-type
stimulants or opioids costs 3-5 Euro.

Another grave consequence of a strict drug policy is that many drug users have to get involved in criminal
activities in order to pay their fines.

The war on drugs generates huge profits that enrich drug dealers. The more the war grows, the more money
they get. The other side that benefits from war are those authorities that fight against drugs and replenish the
budget in this way. Only drug addicts lose.

10
“Opposition Mounts to Georgia’s War on Drugs” by Giorgi Lomsadze, Dec 12, 2016.
11
Institute of Addiction Studies - Ilia State University, Tbilisi, Georgia.
9
4.6. Challenges Drug Users Face and Stigma of Addiction

What are the outcomes for a drug user in Georgia? Financial problems, social isolation, and exclusion from
economic and social life. Innocent people obtain criminal records, which adversely affect their lives: they are
unable to find employment, get a bank credit, and to travel.

No less problematic is the fact that they are deprived of their driver’s license. Many people in Georgia keep
their families by operating a taxi. For some of them, it’s their second job. A good example of trouble the
current drug policy causes is a case of a taxi driver from Rustavi, who contacted Girchi’s office and told that
police detained him for marijuana possession. Though the drug test result was negative, police took his driver’s
license. The man - a father of five kids is unable to work and to earn an income.

There are several common myths and misconceptions about addiction and it deters people who are struggling
with addiction from seeking help. It’s difficult to help and protect people who use drugs when you're
simultaneously criminalizing them.

5. Policy Options

This paper studies economic benefits of marijuana legalization, so there will be no deep discussions about
social and public health impacts followed by it. From proposed and reviewed policy options below will be
chosen the one that is less harmful and brings more benefits, especially economic benefits.

5.1. Status Quo is not the Option

Last ten years of harsh drug policy in Georgia can be summed up in two words - a complete failure. Current
drug policy is outdated and ineffective.

If this policy continues it’s going to have undesirable consequences:

Ø The complexity with purchasing qualitative drugs will compel drug users to continue buying toxic and
harmful drugs available on a black market or preparing a homemade one;

Ø According to research number of intravenous drug users in Georgia is increasing year-over-year. If

regulations stay the same Georgia can get a growth dynamics of intravenous drug users followed by
related diseases;

Ø Drug prohibition will continue entailing direct enforcement costs and drug testing expansion. While
apparently increasing government income, the policy has proven to be problematic and failed to
reduce the availability of illicit drugs within Georgia;

Ø Despite the proven efficacy of methadone substitution therapy, the existing program in Georgia has
certain limitations.

The program is functional through three sources: the donor - The Global Fund to Fight HIV/AIDS, Tuberculosis,
and Malaria, the state program, and the private sector.

Until July 2017, the state program was based on the co-payment principle: the cost of the methadone was
covered by the state, while services were self-paid by patients at 110 Lari (44 USD) per month. The co-payment
did not apply to HIV-positive individuals and those under the poverty line. Beneficiaries of state program were
unable to pay every month so they had to interrupt the treatment (there is no statistics for abandoned
beneficiaries).

10
Although the state program is free of charge now beneficiaries still face some difficulties12.

They have to visit centers every day to get a dose despite weather or state of health. Beneficiaries are strictly
attached to the program because they receive methadone for a limited period of time from 9:00 to 14:00. It
causes large queues especially in the mornings and makes people late for work. In addition, they can't plan
their vacation with families because can't go too far from the center.

Due to lack of guarantees of anonymity and for social reasons there are few women in the methadone
program. According to experts, they make up no more than 2% of the total number of beneficiaries13.

Beneficiaries are forbidden to use a driver's license, not only during a treatment but also for a year after leaving
the program. As mentioned previously driving (distribution, taxi service etc.) is a source of income for many
people in Georgia, including beneficiaries. The state does not offer an alternative option for employment.

In 2015, the country’s total number of methadone substitution therapy program beneficiaries was 2,750 (the
state program had 2000 patients and the Global Fund program 750 patients). According to Center for Mental
Health and Prevention of Addiction nowadays they provide service up to 3,000 beneficiaries. Negligible
numbers in comparison to a number of intravenous drug users throughout the country.

One of the main drawbacks of the program is its vague future. In 2019 the Global Fund will stop its finance and
will leave Georgia. It's unclear if the state will continue financing the Global Fund’s part of the program.

It is also logical to assume that the wave of activism increased over the past years will not stop on achieved
results especially after won lawsuits in the Constitutional Court. So the drug reform in Georgia is a question of
time.

5.2. The Decriminalization Option

As mentioned previously, the National Platform for Drug Policy has already submitted the draft package in
changing the law for the decriminalization of all drugs for review to the Parliament of Georgia. The platform
suggests adopting successful experience of Portugal with drug decriminalization.

Decriminalization takes away monetary penalties and jail sentences for simple possession. It doesn’t cover use,
sale or storage, for which there would still be criminal penalties. Basically, the focus becomes less on
penalization and more on the treatment of drug use.

Portugal, which decriminalized the possession of all drugs for personal use in 2001, is the best example of what
may happen when drugs are decriminalized.

Drug use. One of the most common arguments against marijuana decriminalization is that this will increase use
of marijuana among citizens, especially youth, even if the laws are only applicable to adults.

According to Dr. João Goulão, the architect of Portugal's decriminalization model, drug abuse hasn't been
eliminated in the country, but decriminalization has not led to addiction increase.

The number of adults who have used drugs is decreasing steadily since 2001 in Portugal. Drug use has declined
among those aged 15-24, the population most at risk of initiating drug use. Compared to rest of the EU, young
people in Portugal now use the least amount of “legal high” drugs like synthetic cannabinoids, which are
especially dangerous. Between 2007 and 2012, among the Portuguese population was verified for almost all
drugs a decrease in lifetime prevalence (of any illicit drug from 12% to 9.5%) and recent use (of any illicit drug
from 3.7% to 2.7%) as well as decrease in continuity rates of use (of any illicit drug from 31% to 28%).

12
Based on the interview with a participant of Methadone Substitution Therapy Program, Sep 23, 2017.
13
Lasha Kiladze, Medical Center Uranti, June 27, 2016. http://kvira.ge/264475
11
In this way, that removing criminal penalties for personal drug possession did not increase drug use. There is
essentially no relationship between of a country’s strict drug laws and its rates of drug use. Instead, drug use
tends to rise and fall in line with broader cultural, social or economic trends.

Crime. Despite the argument that marijuana decriminalization will lead to crime increase it appears to have a
positive effect on crime.

Since drug possession in Portugal became administrative rather than criminal offense, decriminalization leads
to the reduction of a number of people arrested and sent to criminal court for drug offenses - from over 14,000
in 2000 to around 6,000 per year once the policy had come into effect in 2001. The proportion of drug-related
offenders (including those who committed offenses under the influence of drugs and/or to fund drug
consumption) in the Portuguese prison population also decreased, from 44% in 1999 to just less than 21% in
2012.

After decriminalization drug users had been freed from a stigma of criminals. It has increased the amount of
those who choose treatment voluntarily. The number of people in drug-treatment in Portugal increased from
1998 to 2011 from 23,600 to 38,000.

All stated gives more credibility to the idea that criminalizing people is an unnecessary way of trying to stop
them from taking drugs.

Drug-related Diseases and Drug-induced Deaths. After decriminalization in Portugal, the number of drug-
related diseases and deaths had rapidly decreased.

There has been a huge reduction in the number of drug users diagnosed with HIV/AIDS. The rate of new HIV
infections in Portugal decreased since 2001 from 1016 cases to only 56 in 2012. Despite the increased number
of people in drug-treatment centers there also has been observed a decreasing rate of Hepatitis B and C cases
among them.

According to United Nations World Drug Report in 2016, Portugal has one of the lowest fatal overdose rates in
the world. In 2012, there were just 16 drug-related deaths in a country with a population of 10,5 million.

Economic impacts of marijuana decriminalization

There are some tangible advantages of decriminalizing marijuana from the economic point of view.

The most compelling argument in favor of cannabis decriminalization is the reduction of the governmental
spending on the law enforcement, ranging from police to corrections.

In a condition of strict drug policy, the state uses a significant part of the budget for arrest, prosecution,
sentencing and incarceration of marijuana users.

Decriminalization of marijuana will relieve the penitentiary system and will also lift a heavy tax burden because
prison costs are to taxpayers.

According to European Council annual report in 2014 and 2015, the 30% of the prison population in Georgia
are jailed for drug offenses. Statistics show that it is the most common crime (for comparison, theft is on the
second place and makes 28.7% of all offenses). In accordance with Georgia's Supreme Court annual data in
2014 there was the highest number of people convicted of drug offenses – 4,003 (4 times higher than in 2012),
of which for 973 applied punishment was imprisonment.

The International Centre for Prison Studies provides the World Prison Brief Data where for January 2017 the
prison population total in Georgia is 9,451. Taking from this number 30% of those who are imprisoned for drug
offense makes 2,835.

12
Daily cost to house inmates in prison is 32,13 Lari 14 (12,85 USD) and 11,727 Lari (4,690 USD) per year
respectively. According to estimates, decriminalizing marijuana and illicit drugs would save taxpayers around
33,2 million Lari (13,2 million USD) per year and reduce the prison population by nearly 30%.

In this way in conditions of decriminalization millions saved on law enforcement (including street drug tests),
criminal justice and prisons can be spent on funding of drug-treatment.

Decriminalization’s drawback

Although the decriminalization of marijuana reduces the negative effects of criminal punishment and
infringement of personal freedom, it does not take into account the needs of those cannabis users who are not
able to grow and produce themselves. As a result, it causes to the illegal black market activation, where is
neither regulation nor taxation. It makes marijuana users overpay and state to lose potential profit.

However, this paper focuses only on economic benefits it will be fair to note that one of the arguments in
opposition of decriminalization is a drugged driving. There is a problem of figuring out the fact of drugged
driving because breathalyzers can’t detect it.

Also, decriminalization opponents claim that cannabis impacts on ones working activities, though supporters
argue that this issue is related to individual characteristics. Besides, even if marijuana is not completely
harmless, according to the research published in the journal "Scientific Reports" in 2015, smoking the cannabis
is about 114 times safer than drinking alcohol.


One of supporting examples that cannabis decriminalization works can be considered the successful example
of Portugal. After 16 years none of the Portuguese politicians in pursuit of voters during the pre-election period
have ever mentioned the return to past anti-drug practices.

5.3. Legalization as the Alternative Solution

Legalization of marijuana has an indisputable advantage over decriminalization - possibility to tax production
and sales of marijuana.

After marijuana legalization, there will be budgetary savings as in case of decriminalization but much bigger
compared to decriminalization.

Except that cannabis legalization will solve problems narrated above: it will decline law enforcement and
correction expenses, will have a positive effect in reducing crimes and decrease number of drug-related
diseases and deaths.

Cannabis legalization in Colorado

One of the great examples of how legalization of marijuana can benefit the economy is cannabis legalization in
Colorado, USA.

In 2012, Colorado (together with Washington) became the first state that legalized marijuana for recreational
use, with sales permitted to anyone over the age of 21. The new laws also allowed for the legal production of
marijuana.

In 2016, Marijuana Policy Group (MPG) - the economic consulting firm, has conducted a study, based on two
years of sales numbers in Colorado. The study measured both the direct effects of legalization (including close
to 1 billion USD in retail sales in 2015) and the industry's spillover effects on the economy of Colorado.


14
Based on the information provided on the website of the Ministry of Corrections and Probation of Georgia.
13
In 2015, the legal marijuana industry in Colorado:

- Created more than 18,000 new full-time jobs;

- Generated 2,4 billion USD in economic activity;
- Brought in about 121 million USD in revenue to the state.

The indirect impacts of cannabis legalization were caused by increased demand for local goods and services,
such as warehouse space rent or lighting and irrigation equipment purchasing. Marijuana retailers rely on
other companies, like contractors, lawyers, and bookkeeping services, to conduct their own businesses.

Regarding taxes, the report finds that marijuana is already overtaking in tax revenue at three times the rate of
the alcohol industry. According to MPG experts, by 2020 marijuana taxes will outstrip cigarette taxes as a
revenue-generator as well. The firm expects that by 2020 marijuana tax revenue will rise to about 150 million
USD.

As for the rapid growth in cannabis sales, experts explain increasing due to a supply shift - away from black
market suppliers, toward licensed suppliers. MPG in the study suggests that the black market is being
significantly reduced by legalization and that those reductions will continue. By 2020, more than 90% of the
market will be supplied by regulated, state-licensed dealers.

Comparative analysis

According to Zurab Japaridze Girchi’s team did a comparative analysis of Colorado and Georgia. Referring to
calculations of the cannabis legalization economic impact Japaridze anticipates 7-8% of annual economic
growth, while in 2015 the economic growth in Georgia was just 2.7%.

Girchi’s analysis is based on information provided by the Colorado Department of Revenue in 2014.

To review the potential economic benefits of marijuana legalization this paper suggests analysis by the same
principle with a difference in some indicators.

Assumptions:

Marijuana users among Georgia’s general population - 490,700 (approx.)

Marijuana is the most commonly used illicit substance in Georgia. According to Alternative Georgia’s report, a
number of cannabis users among general drug users is 67.5% (Kirtadze, Otiashvili & Tabatadze, 2015). Still,
there is no accurate data about marijuana users and it is difficult to make exact calculations.

Japaridze uses a method of calculation suggested by Georgian narcologists: they multiply a total number of
intravenous drug users in the country by ten. The number obtained is a total amount of marijuana users (both
regular and occasional).

As according to the last available data intravenous drug users in Georgia equals 49,700 we get in total 490,700
marijuana users among the general population.

Number of tourists visiting Georgia - 2,26 million (1,26 million + 1 million)

a) A number of cannabis users among existing tourists:
According to Prime Minister Giorgi Kvirikashvili’s report15 the total amount of tourists visited Georgia in 2016
was 6,3 million. Taking for the calculation that every fifth tourist may be a cannabis user (regular or occasional)
a number of cannabis users among existing tourists will be 20% of 6,3 million - 1,26 million;

15
1TV, April 5, 2017. http://1tv.ge/ge/news/view/155851.html
14
b) A number of cannabis users who arrive after cannabis legalization:

Girchi’s team has several calculations separately for 1, 2, 3 and 4 million tourists per year. In this analysis, a
calculation is done only for 1 million tourists - enough to show the profit. Though tourism in Georgia will have a
growing dynamics year-over-year.

Marijuana average price per gram - 20 Lari (8 USD)

According to information gained from regular marijuana users16 in Georgia, currently cannabis in Georgia costs
75 Lari (30 USD) and up; furthermore, the higher price doesn’t guarantee a good quality. So from the
consumer's perspective, the legalization of marijuana could mean lower prices.

By coincidence, the cannabis average price per gram is 8 USD in Colorado by September 201717.

Despite the fact that after legalization the prime cost of cannabis will be low, it still will be sold many times
more expensive. The main reason is restrictions on cannabis availability. In addition, the cheapness of
marijuana will be a challenge for the tobacco and alcohol industry.

Average daily dose - 0.5 gr

According to interviews with local marijuana users on the average, the half-gram per day is quite enough.
Although some users smoke from 0.7 to 1 grams a day. The average daily dose in Colorado is 0.9 grams.

Tax burden for cannabis businesses - 60%
In order to project the magnitude of tax revenue as a result of marijuana legalization, taxation model needs to
be selected.

There will be similar taxation method for marijuana as for alcohol and tobacco. The tax burden will be
regulated by the excise tax. The tax will be increased to 60%.

Apart from the main cannabis industry, there also will be formed other sectors of the economy by the inrush of
tourists (hotels, restaurants, driver services etc.) - and it will be taxed on an average at 25%.

Economic Results in case of 1 million tourists:

• Market size for local marijuana users will be approximately 1,791,000,000 Lari (716,400,000 USD)
10 Lari (price for the daily dose - 0.5 gr) x 490,700 (marijuana users in Georgia) x 365 days (a calendar year).

• Market size for tourists - 276,400,000 Lari (110,560,000 USD)

If one tourist from existing tourists number on the average stays for 7 days and uses 1 gram per day:

20 Lari (price for 1 gram) x 1 260 000 (cannabis users among existing tourists) x 7 (days of visit) = 176,400,000 Lari
(70,560,000 USD).

Plus 1 million new tourists if they stay for 5 days and use 1 gram per day:

20 Lari (price for 1 gram) x 1,000,000 (new tourists) x 5 (days of visit) = 100,000,000 Lari (40,000,000 USD)

Total: 176,400,000 Lari + 100,000,000 Lari = 276,400,000 Lari (110,560,000 USD).


16
Based on interviews, September 18-19, 2017.
17
“Data for the price of weed in: Colorado, United States”; www.priceofweed.com/prices/United-States/Colorado.html
15
 • New economy total - 2, 567,400,000 Lari (1,026,960 USD)

2,067,400,000 (summed markets of cannabis industry) + 500,000,000 Lari (profit from other economic sectors
formed by 1 million new tourists in order that each tourist spends 500 Lari (200 USD) per visit).

• Tax Revenue - 1,365,440,000 Lari (546,176,000 USD)

60% (excise taxes) out of 2,067,400,000 (summed markets of cannabis industry) is 1,240,440,000 Lari (496,176,000
USD);
25% (common taxes) out of 500,000,000 (profit from created by tourists new economic sectors) is 125,000,000 Lari
(50,000,000 USD).

Total: 1,240,440,000 Lari + 125,000,000 Lari = 1,365,440,000 (546,176,000 USD).

• New jobs - 51,348

The legalization of marijuana will create new jobs. Zurab Japaridze suggests calculating new workplaces using this
formula: Georgia’s economy currently makes over 30 billion Lari. There are 600,000 people employed in the
business sector in Georgia.
Dividing 30,000,000,000 into 600,000 gives 50,000 Lari. It means that 50,000 Lari forms one workplace.
Division of the new economy (cannabis industry plus profit from other sectors) into 50,000 will give a number of
new jobs created by marijuana legalization:
2, 567,400,000 Lari ÷ 50,000 Lari = 51,348 workplaces.


It is clear that the economic impact of the cannabis legalization covers many aspects of the economy:

Budgetary savings. Legalization will reduce the need for prosecutorial, judicial, correctional, and police
resource spending by the state annually (as mentioned previously up to 50 million Lari is being spent only on
drug testing and prison costs).

Revenue gains. In a condition of prohibition the production and sale of cannabis are banned, this business
occurs on the black market in cash and does not provide tax revenue for the state.
Legalization will create new economic impact for the society by generating tax revenue for the government
starting from 1,37 billion Lari (547 million USD). For a better understanding of the value, according to Georgia’s
Government Budget 2017, Ministry of Regional Development and Infrastructure of Georgia receives 1,86 billion
Lari, Ministry of Education and Science of Georgia - 1,025 billion Lari, Ministry of Defense – 743 million Lari, and
Ministry of Internal Affairs – 585 million Lari.

Employment. Cannabis legalization will create new jobs both directly in marijuana industry and in tourism
services.

Investment. The newly legalized marijuana market also creates investment opportunities. For example, in
condition of growing tourism (tourists all over are expected but mostly according to current statistics18 from
former Soviet countries and Near East) there will be needed new hotels, feed points, transportation,
entertainment etc.

GDP. Cannabis legalization will help upsurge Georgia’s Gross Domestic Product (GDP), as more goods will be
produced and retailed in Georgia.


Legalization of marijuana definitely is the best solution for Georgia to get economic benefits in short-term
perspective.

18
Rating of foreign visitors by countries, Tabula, January 4, 2017 http://tbl.ge/240n
16
6. Recommendations and Conclusion

Current drug policy in Georgia shows that prohibition is not the most effective policy to reduce consumption of
drugs. Prohibition has negative effects on public health, social and economic aspects: It increases crime and drug-
related diseases and deaths, causes black market, violates civil liberties (in the form of street drug testing, arrests,
and incarceration). Government leaves potential tax revenue as profit for illegal dealers while wasting its resources
on police and prisons without much success.

When looking at marijuana legalization effect on the economy the positive economic impact cannot be ignored.
From the creation of new job opportunities and tax revenue to the budgetary savings from removed prohibition, it is
clear that the economic impact created by the cannabis legalization is beneficial to all. Total economic and
budgetary benefits of legalization of marijuana are much greater than benefits of decriminalization.

This policy paper recommends legalization of marijuana by taxation and regulation.

Legalization of marijuana means that a person will not be arrested or convicted for using marijuana, but is obliged to
follow laws as to age, place, and amount of consumption. Legalization doesn't mean that marijuana will be
uncontrollably scattered on the street. There will be regulations for marijuana businesses (production, distribution,
selling, and licensed cultivation). People will be able to plant marijuana for personal use as well, but still, can be
arrested for selling marijuana if they don't follow laws on licensure and taxation.

This study recommends taxing legalized marijuana similarly to alcohol and tobacco. In this case, will be considered: a
minimum age of legal access to cannabis (18 and up); high tax rates on production, distribution, and sales for
keeping the consumption of marijuana relatively low; licensed cannabis cultivation and production. There must be a
restriction on marijuana and its products advertising. Besides, the government should oblige cannabis producers to
put package-warning messages for enhancing public’s awareness of the harmful effects of smoking marijuana. All
these regulations will help the government to control the production, distribution, sale, and promotion of
marijuana, and will make easier for government to prohibit youth access.

The Government of Georgia is also strongly recommended to take following measures:

To toughen border control to avoid drug trafficking. For this purpose on border control points may be used
specially trained sniffer dogs (according to cynologists - average annual keep cost is 10,000 Lari) or body scanners in
airports (average price for one scanner is 500,000 Lari; searched on Google). Border controllers should be trained
according to the new law and regulations (minor expenses for trainers fee and related guides and printed materials).
Total cost for 20 dogs (200,000 Lari), 10 body scanners (5 million Lari) and border controllers’ training (800,000 Lari)
will make just 6 million Lari (2,4 million USD).

To invest money in addiction treatment and rehab programs for heavy drug users. As mentioned previously
Government of Georgia now spends 5 million Lari (2 million USD) on health programs for people with substance
dependence. Cannabis legalization with its economic benefits will allow spending more money on drug-treatment
centers. The expense in a condition of legalization may be at least ten times higher than now - 50 million Lari (20
million USD).

To fund an anti-drug abuse education program for youth countrywide. Education about drug abuse is an important
part of helping young people to understand the many aspects of this issue. Providing true information about drugs is
not drug propaganda, as it is commonly believed in Georgia. The program should provide young people with
information about how drugs affect the mind and body and to promote healthy lifestyles. Conditionally the budget
of a program is calculated as 4 million Lari (1,6 million USD).

In this way, according to present calculations, the government of Georgia will need to spend approximately 60
million Lari (24 million USD) for the implementation of all three measures. This amount is insignificant in comparison
to annual revenue up to 1,37 billion Lari (546 million USD).

Thus, cannabis legalization proves its win-win outcome. The War on Drugs is useless. Year-over-year it becomes
tougher, taking more lives, means, and resources. It's definitely time for new reforms and changes - it’s time to
legalize marijuana in Georgia.
17

7. Work Cited


2017 State Budget of Georgia.
http://www.parliament.ge/ge/kanonmdebloba/announcements-all/announcements-main/saqartvelos-2017-wlis-
saxelmwifo-biudjetis-shesaxeb-saqartvelos-kanonis-proeqti-tandartuli-dokumentebi.page

The judgment of the Constitutional Court - October 24, 2015.
http://constcourt.ge/en/legal-acts/judgments/citizen-of-georgia-beka-tsikarishvili-v-the-parliament-of-georgia.page

“Norms envisaging imprisonment for marijuana use now null and void in Georgia” – Agenda.Ge, December 24,
2016. http://agenda.ge/news/72349/eng

"Constitutional Court's Judgment on Sowing, Growing and Cultivation of Weed" - Levan Jorbenadze, July 19, 2017.
http://www.drugpolicy.dsl.ge/eng/news.htm

European Monitoring Centre for Drugs and Drug Addiction. Country overview: Georgia.
J.D. Javakhishvili, L. Sturua, I. Kirtadze, N. Balanchivadze, D. Otiashvili; edited by T. Zabransky, 2015.
http://www.emcdda.europa.eu/publications/country-overviews/ge#gps

NDI Public Opinion Poll Results on Georgia’s Foreign Policy, Drug Policy – Tabula, July 26, 2017.
http://www.tabula.ge/en/story/122379-ndi-public-opinion-poll-results-on-georgias-foreign-policy-drug-policy

“In Georgia, the new National Platform for Drug Policy will promote dialogue as well as advocacy” – Aidspan,
Tinatin Zardiashvili, May 22, 2016. http://www.aidspan.org/gfo_article/georgia-new-national-platform-drug-policy-
will-promote-dialogue-well-advocacy

Girchi about Legalization - last edited July 3, 2017.
https://girchi.ge/ka/story/meti-tavisupleba-ra-ar-mogvcons-ras-vaketebt/125/

2014 Report on Drug Situation in Georgia - by Ministry of Internal Affairs of Georgia.

Population Size Estimation of People who Inject Drugs in Georgia 2014 - Study report, July 2015.
Prepared by Bemoni Public Union (BPU) and Curatio International Foundation (CIF).

HIV/AIDS registered cases in Georgia - September 18, 2017, Infectious Diseases, AIDS and Clinical Immunology
Research Center. http://www.aidscenter.ge/epidsituation_geo.html

Drug Control in Georgia: Drug Testing and the Reduction of Drug Use? - The Beckley Foundation Drug Policy
Programme, by David Otiashvili M.D, Péter Sárosi and Gábor L. Somogyi, May 2008.

Narcophobia in Georgia – Liberali, Jana Javakhishvili, March 7, 2014
http://liberali.ge/blogs/view/5850/narkofobia-saqartveloshi-iratsionaluri-ratsios-tsinaaghmdeg

Drug Situation in Georgia - Annual report, Davit Otiashvili, 2012. http://www.altgeorgia.ge/

Retention in Georgia opioid substitution therapy program and associated factors - by Ekaterine Ruadze and
Khatuna Todadze, December 8, 2016. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5146853/

Drug decriminalisation in Portugal: setting the record straight – Transform, June 11, 2014.
http://www.tdpf.org.uk/blog/drug-decriminalisation-portugal-setting-record-straight

The success of Portugal’s decriminalisation policy – in seven charts – Transform, July 14, 2014.
http://www.tdpf.org.uk/blog/success-portugal%E2%80%99s-decriminalisation-policy-%E2%80%93-seven-
charts

18
Global Compass: “Drugs: War or Store?” – film, The Economist, 2015.
http://www.economist.com/content/global-compass-drugs-war-or-store

World Prison Brief data: Georgia - January 31, 2017. http://www.prisonstudies.org/country/georgia

Georgia's Supreme Court annual data in 2014 - http://www.supremecourt.ge/statistical2016/

Comparative risk assessment of alcohol, tobacco, cannabis and other illicit drugs using the margin of exposure
approach - Scientific Reports, Dirk W. Lachenmeiera and Jürgen Rehm, January 30, 2015.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4311234/

“14 Ways Marijuana Legalization Could Boost The Economy” - The Huffington Post, Harry Bradford,
July 11, 2012. http://www.huffingtonpost.com/2012/11/07/marijuana-economy-14-reasons_n_2089107.html

Economic benefits of cannabis legalization in Georgia - public lecture by Zurab Japaridze,
Georgia’s Future Academy, February 26, 2017. https://www.youtube.com/watch?v=q2JqqHRwMoA

“The marijuana industry created more than 18,000 new jobs in Colorado last year” - The Washington Post,
Christopher Ingraham October 27, 2016.
https://www.washingtonpost.com/news/wonk/wp/2016/10/27/the-marijuana-industry-created-over-18000-new-
jobs-in-colorado-last-year/?tid=sm_tw&utm_term=.8e73a324e6e4

Economic Impact of Marijuana Legalization in Colorado - Marijuana Policy Group, October 2016.
http://www.mjpolicygroup.com/

The Economic Benefits of Legalizing Weed - Investopedia Academy, Mrinalini Krishna, updated on April 20, 2017
http://www.investopedia.com/articles/insights/110916/economic-benefits-legalizing-weed.asp

19