Italy Holds Weed Referendum

Ravenna. Italy. Cannabis plants during an exhibition of plants and flowers in Piazza Kennedy. Photo: Shutterstock

MILAN, Sept 22 (Reuters Breakingviews) – Italy may soon jump on the weed bandwagon. A nationwide referendum to legalise cannabis will likely take place early next year. If Italian voters embrace dope, it will spark a domino effect across Europe.

Backers of the pro-weed referendum have already gathered more than 500,000 signatures, the minimum required to hold a nationwide plebiscite. That paves the way for a decriminalisation vote, mirroring what happened in 18 U.S. states. With 57% of Italian voters expected to back the proposal, according to pollster Sondaggi Bidimedia, Italy has a concrete chance to turn its current restrictive system into Europe’s most liberal one.

A new approach to cannabis would have multiple financial and economic benefits, as the U.S. and Canadian experiences shows. Italy’s market for recreational consumption is probably worth around 8 billion euros, an average of estimates compiled by National Research Council researcher Piero David shows. Currently this is a boon for local and foreign criminal gangs who dominate the illegal weed market in Italy. But once legalised and taxed at 75%, roughly in line with cigarettes, it would add 6 billion euros a year to Italy’s strained state coffers. More savings would come from fewer trials and jail detentions.

There are other advantages. Under Italian law, recreational weed use in small quantities and consumption for medical purposes is allowed. But selling and producing the herb is a criminal offence. The state holds a de facto production monopoly for legal usage but cannot meet rising demand. Medical consumption alone jumped 30% year-on-year to 1.1 tonnes in 2020, state data show. Allowing new players to produce cannabis for multiple uses would add 35,000 new jobs, say supporters. That’s not unthinkable: U.S. jobs linked to legal marijuana doubled to 321,000 in three years, says cannabis marketplace Leafly.

Italy could also gain a stock market edge. Canada’s decision in 2018 to legalise recreational marijuana triggered an initial public offering frenzy, but this has yet to flood Europe. Being based in a country where private use is openly legal would give Euronext-owned (ENX.PA) Borsa Italiana an advantage vis-à-vis other European markets.

As the U.S. experience shows, once individual states take the plunge on cannabis, the economic advantages become visible to all. It triggered a domino effect across America. If Italy crosses the sticky weed line, European neighbours will also follow.