What does legalising cannabis do to a city?

A cool person in Colorado doing something cool. Image: Getty.

It’s 4/20, a.k.a. National Weed Day: the day that a heady smog rises above every capital city, and hard currencies are replaced by fistfuls of crushed Doritos. In anticipation of 4/20, states in Australia and the United States have blazed up early, by announcing their plans to (partially) legalise cannabis.

Such decisions are made at national and state level. But, while advocates used to cite data collected from cannabis convivial countries like the Netherlands and Uruguay, a move towards legalisation in many U.S. states has lead to a spate of research at city level.

So, with this in mind, what impact does legalising cannabis have on a city and its infrastructure?

Economic benefits and drawbacks

Established weed welcomers have been long been aware of the economic benefits of legalisation: in the Netherlands, tax on coffee shops alone nets the government over €400m per annum. This is despite efforts by city councils to curtail the number of people who can buy and smoke cannabis.

Since Colorado legalised cannabis in November 2012, the state capital Denver has seen a “gold rush” of tourists, investment and new residents. A recent report from the Drug Policy Alliance found that the opening of just two dispensaries in Denver created 280 jobs and an economic output of $30m in the first half of 2014. There has also been an impact on the city’s housing market, with rent prices increasing by 9.6 per cent in 2014 and real estate prices rose by 10 per cent.

That said, these numbers are only impressive if a city actually wants drugs tourists and half its workforce priced out of the housing market.

And even though the sale of cannabis has benefited the Dutch economy, in October 2011 the border-city of Maastricht started banning foreigners from buying and smoking it. City authorities declared that drugs tourism was causing major traffic problems and disrupting residents’ ability to use the city. More recently Amsterdam, has started closing coffee shops in an attempt to make its central tourist district a bit more classy (elitist) and less sketchy (fun).


Less petty crime, more serious crime

Colorado legalised cannabis in 2012. Two years later, arrests for possession were down by 95 per cent in comparison to 2010. (You can still be arrested for carrying more than one ounce at a time.)

In theory, fewer arrests means less police time spent harassing teenagers suffering from pink eye. That in turn means fewer tax dollars spent on processing (in New York City the average possession charge costs $1000-$2000); fewer non-violent, first time offenders in prison; and an economy that benefits from not having a large proportion of its potential work force behind bars.

This theory holds true for cities that have legalised cannabis in the last five years. But! There has been a slight increase in serious crime. Not enough for residents to retreat into gated communities and start hoarding Fray Bentos pies; just enough for anti-legalisation advocates to start getting twitchy.

In 2015 burglaries at Denver cannabis businesses made up 2.5 per cent of attempted robberies in the city. And local police report that the number of “marijuana related crimes” are on the up – although there’s a gaping chasm of information about how these crimes were “related” to cannabis).

It is(n’t) easy being green

By now, it’s hopefully clear to everyone that people who illegally grow cannabis are basically the Hufflepuffs of crime. But, apparently, smoking something grown in weird Barry’s asbestos-ridden attic isn’t always 100 per cent safe. Legalisation means regulation – and while there’s something rather endearing about the idea of furtive farmers taking over an old Debenhams building, the potential for large electrical fires isn’t quite as cute.

In built up areas there is a real danger that herb happy Hufflepuffs might accidentally endanger hundreds of residents. But even if a city does decide to eliminate this risk, the issue of energy consumption remains. Cannabis cultivation uses a massive amount of water and energy, something that Californian residents are starting to notice is taking a toll.

Water use by cannabis farms is already impacting some city residents’ water supply. Increased consumption will place greater pressure on politicians to consider the environmental impact of legalisation, too.

 
 
 
 

The ATM is 50. Here’s how a hole in the wall changed the world

The olden days. Image Lloyds Banking Group Archives & Museum.

Next time you withdraw money from a hole in the wall, consider singing a rendition of happy birthday. For today, the Automated Teller Machine (or ATM) celebrates its half century.

Fifty years ago, the first cash machine was put to work at the Enfield branch of Barclays Bank in London. Two days later, a Swedish device known as the Bankomat was in operation in Uppsala. And a couple of weeks after that, another one built by Chubb and Smith Industries was inaugurated in London by Westminster Bank (today part of RBS Group).

These events fired the starting gun for today’s self-service banking culture – long before the widespread acceptance of debit and credit cards. The success of the cash machine enabled people to make impromptu purchases, spend more money on weekend and evening leisure, and demand banking services when and where they wanted them. The infrastructure, systems and knowledge they spawned also enabled bankers to offer their customers point of sale terminals, and telephone and internet banking.

There was substantial media attention when these “robot cashiers” were launched. Banks promised their customers that the cash machine would liberate them from the shackles of business hours and banking at a single branch. But customers had to learn how to use – and remember – a PIN, perform a self-service transaction and trust a machine with their money.

People take these things for granted today, but when cash machines first appeared many had never before been in contact with advanced electronics.

And the system was far from perfect. Despite widespread demand, only bank customers considered to have “better credit” were offered the service. The early machines were also clunky, heavy (and dangerous) to move, insecure, unreliable, and seldom conveniently located.

Indeed, unlike today’s machines, the first ATMs could do only one thing: dispense a fixed amount of cash when activated by a paper token or bespoke plastic card issued to customers at retail branches during business hours. Once used, tokens would be stored by the machine so that branch staff could retrieve them and debit the appropriate accounts. The plastic cards, meanwhile, would have to be sent back to the customer by post. Needless to say, it took banks and technology companies years to agree common standards and finally deliver on their promise of 24/7 access to cash.

The globalisation effect

Estimates by RBR London concur with my research, suggesting that by 1970, there were still fewer than 1,500 of the machines around the world, concentrated in Europe, North America and Japan. But there were 40,000 by 1980 and a million by 2000.

A number of factors made this ATM explosion possible. First, sharing locations created more transaction volume at individual ATMs. This gave incentives for small and medium-sized financial institutions to invest in this technology. At one point, for instance, there were some 200 shared ATM networks in the US and 80 shared networks in Japan.

They also became more popular once banks digitised their records, allowing the machines to perform a host of other tasks, such as bank transfers, balance requests and bill payments. Over the last five decades, a huge number of people have made the shift away from the cash economy and into the banking system. Consequently, ATMs became a key way of avoiding congestion at branches.

ATM design began to accommodate people with visual and mobility disabilities, too. And in recent decades, many countries have allowed non-bank companies, known as Independent ATM Deployers (IAD) to operate machines. The IAD were key to populating non-bank locations such as corner shops, petrol stations and casinos.

Indeed, while a large bank in the UK might own 4,000 devices and one in the US as many as 12,000, Cardtronics, the largest IAD, manages a fleet of 230,000 ATMs in 11 countries.


Bank to the future

The ATM has remained a relevant and convenient self-service channel for the last half century – and its history is one of invention and re-invention, evolution rather than revolution.

Self-service banking and ATMs continue to evolve. Instead of PIN authentication, some ATMS now use “tap and go” contactless payment technology using bank cards and mobile phones. Meanwhile, ATMs in Poland and Japan have used biometric recognition, which can identify a customer’s iris, fingerprint or voice, for some time, while banks in other countries are considering them.

So it’s a good time to consider what the history of cash dispensers can teach us. The ATM was not the result of a eureka moment of a single middle-aged man in a bath or garage, but from active collaboration between various groups of bankers and engineers to solve the significant challenges of a changing world. It took two decades for the ATM to mature and gain widespread, worldwide acceptance, but today there are 3.5m ATMs with another 500,000 expected by 2020.

Research I am currently undertaking suggests that ATMs may have reached saturation point in some Western countries. However, research by the ATM Industry Association suggests there is strong demand for them in China, India and the Middle East. In fact, while in the West people tend to use them for three self-service functions (cash withdrawal, balance enquiries, and purchasing mobile phone airtime), Chinese customers consumers regularly use them for as many as 100 different tasks.

Taken for granted?

Interestingly, people in most urban areas around the world tend to interact with the same five ATMs. But they shouldn’t be taken for granted. In many countries in Africa, Asia and South America, they offer services to millions of people otherwise excluded from the banking sector.

In most developed counties, meanwhile, the retail branch and the ATM are the only two channels over which financial institutions have 100 per cent control. This is important when you need to verify the authenticity of your customer. Banks do not control the make and model of their customers’ smart phones, tablets or personal computers, which are vulnerable to hacking and fraud. While ATMs are targeted by thieves, mass cybernetic attacks on them have yet to materialise.

The ConversationI am often asked whether the advent of a cashless, digital economy heralds the end of the ATM. My response is that while the world might do away with cash and call ATMs something else, the revolution of automated self-service banking that began 50 years ago is here to stay.

Bernardo Batiz-Lazo is professor of business history and bank management at Bangor University.

This article was originally published on The Conversation. Read the original article.