Evolution of cannabis regulations and their overlooked link with money laundering: Australia as a critical case study

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Purpose

The purpose of this paper is to interrogate if the legal status of a cannabis affects money laundering activity. The legal status of cannabis continues to evolve globally; at the same time, its market remains enormous. Much of this market represents dirty money from criminal acts, which often requires laundering. In the context of changing cannabis regulations, legislation, and policies, the authors propose the possible implications such changes may have on the extent of money laundering.

Design/methodology/approach

This paper proposes the implications of the evolution of cannabis regulations on money laundering activities, using the theoretical underpinning of rational choice. Using Australia as a replicable critical case study, the paper, using the Walker gravity model and using United Nations Office on Drugs and Crime-reported prices of cannabis from 2003 to 2017 and Australian Criminal Intelligence Commission reports empirically validates the effects of cannabis regulations on the proceeds available for laundering.

Findings

This study finds support for the argument that prohibitive measures toward cannabis use contribute to increases in the need to launder generated proceeds.

Research limitations/implications

The findings can be replicated in other countries and may contribute to novel propositions within the debate on the legalization of cannabis use, which has, thus, far primarily focused on the areas of health, crime, taxation and education.

Originality/value

To the best of the authors’ knowledge, no study has yet attempted to provide an economic analysis of the effects of cannabis policy changes on money laundering.

Original languageEnglish
Pages (from-to)970-988
Number of pages19
JournalJournal of Money Laundering Control
Volume26
Issue number5
Early online date02 Feb 2023
DOIs
Publication statusPublished - 22 Nov 2023

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