A Cannabis Sales Pitch for Indian State Governments (Except Sikkim)

The Kush

Hi! Welcome to the 10th edition of The Kush, our newsletter written specifically for Mondays and Tuesdays. If you’re reading this for the first time, then welcome. We’ve been tripping for so long now, that it still…feels good. It’s incredible really, the ability of the human body to adapt to environmental pressures.

For the first-time readers, The Kush is our newsletter where we trip on the narratives blowing across all the world today, events that seek to shape the future in more ways than one. Many of which will be important for you. So start blazing and let’s begin.

Indian States Need Cannabis Power. Will They Use it?

A deal (it was also written into the Indian constitution) was made in 2017 by late Indian Finance Minister Arun Jaitley with multiple Indian states. This is how his sales pitch to the state governments looked like – 

  • Sales Pitch 1: Let’s replace hundreds of inefficient state and central taxes with one tax called the Goods and Services Tax (GST). We’ll leave real estate, petrol, electricity and alcohol out of it. You states handle that (especially alcohol lol). Sounds great right?
  • Sales Pitch 2: There is only one thing you need to understand. Come on, let’s finish this because we cannot wait. We’re changing the principle of taxation – previously it was origin based, now we’re making this as a destination-based tax. Collect tax revenue from the destination, not the origin. Got it?

    Cheer up now! This means that the ability to tax goods and services and raise revenue (from the blood and sweat of our brilliant, aspirational young population and many others from our older generation) will shift from origin or producing states to destination or consuming states. Peace?
  • Sales Pitch 3: I know there will be pain, but let’s not wait, we’ve to hurry. Some of you guys will suffer from a shortfall of funds because we’re implementing a whole new system for god’s sake. Don’t worry though, we promise, the central government, through the parliament will pass a law on compensating the state governments for any shortfall in GST collection from a linear projection of a 14% annual increase over 2017-2022.

    In short, don’t worry! We’ll compensate you. Promise. We’ve passed a law! Everything is Ok.

Here’s Times of India in September, 2020.

All states would not agree to the reform, since some were potential losers, and many states were reluctant to give up their taxation powers permanently in the hope that GST would yield more in the long run. Their fears were assuaged only by Jaitley’s generosity. He was willing to make major financial sacrifices to get the states on board. That enabled him to succeed where many predecessors had failed. Jaitley guaranteed the states an increase in their share of GST revenue of 14% per year for five years till March 2022. He promised that the Centre would make good any shortfall in the guaranteed 14% target”

Source: Press Trust of India (PTI). In picture: Arun Jaitley, late former finance minister of India

Arun Jaitley, May He Rest in Peace. What a champion. 

Arun Jaitley prayed that India’s GDP would keep up and he would be able to make good on his promise. Alas, it didn’t. For reasons that he had absolutely nothing to do with. And India has a new Finance Minister, Nirmala Sitharaman now.

  • Jaitley hoped that fast GDP growth would reduce the pains of transition. Alas, growth started dipping steadily after the GST deal was signed. GDP growth declined from 8.2% in 2016-17 to 7%, 6.1% and 4.2% in the next three years”
  • “The coronavirus will now send growth crashing to maybe minus 10% this year. That has blown a huge hole in central and state finances”
  • The central cesses are grossly inadequate to fund the shortfall in the 14% revenue growth promised to the states”
  • There is a doctrine of “force majeure” or “act of God” in commercial contracts that enables a party to escape from a guarantee in the event of a natural disaster for which it is not responsible.”

Nirmala Sitharaman has invoked force majeure to avoid paying the states their due. Many states, from Punjab to West Bengal are furious. Why can’t the Central Government ask the RBI for just 2.35 lakh crores?, they ask. And no one’s happy. Especially the ones who really need it, unlike some states who are pretty fine and can borrow to meet their immediate requirements. 

This is our pitch to the Indian states who can show spine: Cannabis. That’s it. 

Yes it won’t cure all their financial woes in one go, but at least it’s worth considering it since cannabis sales have largely been underground. Medical cannabis programs are one thing every state can definitely explore and incentivize Indian companies for the same, who will then bring world-class standards to cannabis and build an industry from scratch. And don’t forget the export revenue by sending Indian cannabis all over the world.   

Enough said. Let’s keep blazing. 

The (Progressive) Indian Media Pitches for Cannabis

In the last one month, many progressive Indian media outlets began writing about cannabis’ value from an economic and medical point of view. Would this attention on cannabis have come to the fore, if it were not for the fact that Bollywood personalities Rhea Chakraborty (vilified to no end by the Indian media) and Sushant Singh Rajput (Rest in peace) both used cannabis?, we aren’t so sure. But it’s a welcome change. Is the Ministry of Ayurveda and the Narcotics Control Bureau listening? 

However, all the Indian media portals quote the same source: Neha Singhal and Naveen Ahmad’s fantastic research piece on cannabis for the Vidhi Centre for Legal Policy. 

We read the entire thing. 

It was brilliant. Let’s take a few excerpts from their research paper and trip on them for our enjoyment. Cannabis, FTW. We are not interested in making a case for cannabis’ regulation as a safe substance with hundreds of economic applications, anymore. More or less, we feel it’s now about common sense and an ability to put aside pre-conceived notions and beliefs, and rely on science and logic.  

In today’s day and age, ample scientific and anecdotal evidence already exists that prove beyond a measure of doubt that government regulators all over the world are overwhelmed with the constant changes that our society is currently going through. Some have chosen to be progressive while some have chosen to sleep. 

What is the way forward as per Neha and Naveen? 

As India continues to walk on the very path that is now being abandoned by its proponents (Thank you USA), Sikkim provides a promising indigenous de-criminalisation model. The Sikkim Anti-Drugs Act, 2006 (“SADA”) does not utilise deterrence to curb drug use and relies on a public health approach to protect the best interests of a drug user. We recommend that India should decriminalise cannabis use completely and adopt a public health approach to address drug addiction and use” 

Truth has been spoken. Truth makes people uncomfortable, especially the ones with a vested economic interest in keeping the truth hidden. Cannabis is not going anywhere. People who’re uncomfortable can be.  

Let’s keep blazing. 

Have a great day 🙂

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