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.

 
 
 
 

Businesses need less office and retail space than ever. So what does this mean for cities?

Boarded up shops in Quebec City. Image: Getty.

As policymakers develop scenarios for Brexit, researchers speculate about its impact on knowledge-intensive business services. There is some suggestion that higher performing cities and regions will face significant structural changes.

Financial services in particular are expected to face up to £38bn in losses, putting over 65,000 jobs at risk. London is likely to see the back of large finance firms – or at least, sizable components of them – as they seek alternatives for their office functions. Indeed, Goldman Sachs has informed its employees of impending relocation, JP Morgan has purchased office space in Dublin’s docklands, and banks are considering geographical dispersion rather concentration at a specific location.

Depending on the type of business, some high-order service firms will behave differently. After all, depreciation of sterling against the euro can be an opportunity for firms seeking to take advantage of London’s relative affordability and its highly qualified labour. Still, it is difficult to predict how knowledge-intensive sectors will behave in aggregate.

Strategies other than relocation are feasible. Faced with economic uncertainty, knowledge-intensive businesses in the UK may accelerate the current trend of reducing office space, of encouraging employees to work from a variety of locations, and of employing them on short-term contracts or project-based work. Although this type of work arrangement has been steadily rising, it is only now beginning to affect the core workforce.

In Canada – also facing uncertainty as NAFTA is up-ended – companies are digitising work processes and virtualising workspace. The benefits are threefold: shifting to flexible workspaces can reduce real-estate costs; be attractive to millennial workers who balk at sitting in an office all day; and reduces tension between contractual and permanent staff, since the distinction cannot be read off their location in an office. While in Canada these shifts are usually portrayed as positive, a mark of keeping up with the times, the same changes can also reflect a grimmer reality.  

These changes have been made possible by the rise in mobile communication technologies. Whereas physical presence in an office has historically been key to communication, coordination and team monitoring, these ends can now be achieved without real-estate. Of course, offices – now places to meet rather than places to perform the substance of consulting, writing and analysing – remain necessary. But they can be down-sized, with workers performing many tasks at home, in cafés, in co-working spaces or on the move. This shifts the cost of workspace from employer to employee, without affecting the capacity to oversee, access information, communicate and coordinate.

What does this mean for UK cities? The extent to which such structural shifts could be beneficial or detrimental is dependent upon the ability of local governments to manage the situation.


This entails understanding the changes companies are making and thinking through their consequences: it is still assumed, by planners and in many urban bylaws and regulations, that buildings have specific uses, that economic activity occurs in specific neighbourhoods and clusters, and that this can be understood and regulated. But as increasing numbers of workers perform their economic activities across the city and along its transport networks, new concepts are needed to understand how the economy permeates cities, how ubiquitous economic activity can be coordinated with other city functions, such as housing, public space, transport, entertainment, and culture; and, crucially, how it can translate into revenue for local governments, who by-and-large rely on property taxes.

It’s worth noting that changes in the role of real-estate are also endemic in the retail sector, as shopping shifts on-line, and as many physical stores downsize or close. While top flight office and retail space may remain attractive as a symbolic façade, the ensuing surplus of Class B (older, less well located) facilities may kill off town-centres.

On the other hand, it could provide new settings within which artists and creators, evicted from their decaying nineteenth century industrial spaces (now transformed into expensive lofts), can engage in their imaginative and innovative pursuits. Other types of creative and knowledge work can also be encouraged to use this space collectively to counter isolation and precarity as they move from project to project.

Planners and policymakers should take stock of these changes – not merely reacting to them as they arise, but rethinking the assumptions that govern how they believe economic activity interacts with, and shapes, cities. Brexit and other fomenters of economic uncertainty exacerbate these trends, which reduce fixed costs for employers, but which also shift costs and uncertainty on to employees and cities.

But those who manage and study cities need to think through what these changes will mean for urban spaces. As the display, coordination and supervision functions enabled by real-estate – and, by extension, by city neighbourhoods – Increasingly transfer on-line, it’s worth asking: what roles do fixed locations now play in the knowledge economy?

Filipa Pajević is a PhD student at the School of Urban Planning, McGill University, researching the spatial underpinnings of mobile knowledge. She tweets as @filipouris. Richard Shearmur is currently director of the School, and has published extensively on the geography of innovation and on location in the urban economy.