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By Mihar Dias (C) Copyright December 2022
Why don't we learn from California about increasing revenue for the state and curb smuggling by legalising marijuana?
But before the Economics Minister starts calculating how much the country could make if we were to emulate California, just listen to what the MB of Kedah had to say. "We have a lot of ketum in Kedah, but it is currently being smuggled. The state government [...] wants to resolve the issue of ketum smuggling through export," Datuk Seri Muhammad Sanusi Md Nor told the press in May 2022.
Kedah has about 84,577 ketum trees over 140ha with Padang Terap district recording the widest area of 94.36ha, followed by Pendang (30.5ha), Sik (7.2ha) and Baling (3.7ha).
Kedah stands to reap benefits from the export revenue and simultaneously solve problem of ketum smuggling across the border into Thailand.
Sanusi said the export of ketum leaves is curbed partly because it is used as a substitute for marijuana and other drugs.
However, recent technological discoveries has found that they may be used in health, wellness and medical products. The United States is the number one importer of ketum for its pain and anxiety relief effects.
Sanusi added that the government wasted large amount of financial and human resources to prevent ketum smuggling when it could be reduced substantially by allowing the commodity to be properly exported through official channels.
We do not know the rough estimates for Kedah or how much the state could make from ketum but going by California's experience, National Organization for the Reform of Marijuana Laws (NORML) estimates that "a legally regulated market for marijuana could yield the state at least $1.2 billion in tax revenues and reduced enforcement costs. A basic $50/ounce excise tax would yield about $770 - 900 million per year plus another $240-360 million in sales taxes. In addition, the state would save over $200 million in enforcement costs for arrests, prosecutions and prison."
The above numbers are about three to four years old. California has since legalised marijuana and are already enjoying the benefits for health wellness and treatment for specific medical problems.
Here's where we need the expertise from the Ministry of Economics to calculate the revenue for Kedah in case we plan to legalise ketum and ganja use in the future.
NORML says additional benefits would accrue from increased employment and spinoff industries. "Total retail sales of marijuana could be on the order of $3-$5 billion, with total economic impact of $12-$18 billion including spinoff industries such as coffeehouses, tourism, plus industrial hemp."
Anyway, for a start let Kedah export the ketum that's already available to neighbouring Thailand that in turn re-export them to US and Europe because of the tremendous value of and demand for its use in the health, wellness and medical industries.
Allowing them to export would alleviate rural poverty overnight without the federal government having to lift a finger. But at the same time the federal government would be able to minimise financial and human resources in the fight against illegal export of ketum leaves. In addition, the country benefits from duty on ketum exports.
This is worth looking into because Kedah ketum is well sought after by health, wellness and medical manufaturers in Europe and the US. If export of current stocks prove to be successful, then perhaps we may be able to mobilise farmers in the state to supplement their income by growing ketum and move them out of rural poverty more rapidly.
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