Italia will be the first to brighten up Europe's weed biz by exposing it to its first attempt

Italia will be the first to brighten up Europe's weed biz by exposing it to its first attempt ...

(Reuters Breakingviews) - Italy may soon jump on the weed wagon. Early next year will likely be a nationwide referendum on the legalization of cannabis. If it's an italian vote, it will have a domino effect in Europe.

More than 500,000 signatures have been collected by supporters of the pro-weed referendum, the minimum required to hold a nationwide plebiscite. That opens the way for a decriminalisation vote, similar to what happened in 18 United States states. According to Sondaggi Bidimedia, Italy has a concrete chance to transform its current restrictive system into Europe's most liberal one, with 57 percent of it'dvying voters expected to support the proposal.

As the USA and Canada experience show, a new approach to cannabis offers numerous financial and economic benefits. Piero David estimates that it's worth about 8 billion euros, a typical estimate of estimates made by National Research Council researcher. This is now a welcome gift for local and foreign criminal gangs who dominate the illegal weed industry in Italy. But it would once again pay 75%, roughly in line with cigarettes, to Italy's strained state coffers by adding 6 billion euros a year. Reduced trials and jail detentions would make more money.

There are also benefits. Recreational weed use in small quantities and consumption for medical purposes is permitted under it's legal basis. However, selling and producing the herb is a crime. The state holds a de facto production monopoly for legal usage, but it does not help meet the rising demand. According to state data, medical consumption alone increased 30% year-on-year to 1.1 tonnes in 2020. According to supporters, allowing new players to create cannabis for multiple uses would add 35,000 new jobs. Thats not an unimaginable: The number of US jobs linked to legal marijuana in three years has risen to 321,000, according to cannabis marketplace Leafly.

Italia may also gain a share market edge. The decision in 2018 by Canada to legalise recreational marijuana triggered an initial public offering frenzy, but it has yet to be resurfaced in Europe. Being based in a country where private use is openly legal would give Euronext-owned (ENX.PA) Borsa Italiana vantage vis--vis other European markets.

As the US Census has revealed, once distinct states take the plunge on cannabis, the economic benefits become apparent to all. It caused a domino effect in America. If Italy crosses the sticky weed line, European neighbours will follow.

Follow @LJucca on Twitter.

NEWS FOR CONTEXT

- The organisers of a pro-cannabis referendum in Italy claimed on Sept. 18 that they had collected the 500,000 signatures necessary to trigger 'a nationwide referendum early next year'.

- If confirmed, the vote seeks to legalise the cultivation of weed for personal use and eliminate sanctions on other cannabis-related crimes.

- About 57 percent of those polled by Sondaggi Bidimedia in May indicated they were in favor of legalising cannabis. Interestingly, 52 percent of respondents who were against Eurispes conducted a poll last year.

George Hay and Karen Kwok contributed to this Editing.

Breakingviews are the beginning of the Break. Breakingviews is the world's leading source of agenda-setting financial information. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the globe every day. Visit https://www.breakingviews.com/trial and follow us on Twitter @BreakingviewS and www.breakview.org for a free trial of our full service. All opinions expressed are those of the authors.

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