From Innocent Bystanders, a review of global drug production by Peter Reuter offers an interesting perspective on why most cannabis is grown in the countries it is consumed in, whereas opium and coca are produced elsewhere despite the associated costs of smuggling.  According to the UNODC, Bolivia, Columbia and Peru account for the entirety of commercial coca production, and in 1994, Afghanistan and Myanmar accounted for more than 90% of global opium production.  However, the picture for cannabis production is very different.  The Canadian market is now considered self-sufficient, in the US more than 50% of the cannabis is domestically produced, whilst  The Netherlands accounts for a large share of the cannabis in Europe.  The reason cannabis production is different?

  • the bulkiness per unit value raises smuggling costs substantially
  • the high dollar yield per acre reduces risks of detection per dollar of production
  • there is a ’boutique’ market of users and growers interested in developing better breeds of the plant, and many users ‘grow their own’
  • entry into the market is easy, because the seeds are widely available.  There are limited economies of scale in growing beyond a few plants, and no further processing is required.