Canadian Legalization of Cannabis reduces both its cash usage and ‘Black’ Economy

Charles Goodhart and Jonathan Ashworth

No 13448, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The Canadian Government legalized Cannabis usage on October 17th, 2018. During the same month, primarily in the week before and after such legalization, the amount of cash in circulation fell quite materially, in contrast to the rises typically observed in previous years. A key driver is likely to have been Cannabis users switching from cash payments for illegal purchases to using standard recordable electronic payments for their purchases, which have now become legal. The legalization of Cannabis should ultimately reduce the size of the Underground economy by around 4 or 5 percent, with a much bigger decline likely in the black economy.

Keywords: Cannabis; Canada; Cash; Black economy (search for similar items in EconPapers)
JEL-codes: D12 E41 K40 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-iue, nep-law, nep-mac and nep-pay
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP13448 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13448

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13448

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().