It is widely understood that it is expensive to enforce a policy of prohibition, whether the prohibition is on the sale of cannabis or just the simple possession and use of cannabis. Critics of cannabis prohibition, and some judges and law enforcement officers, have criticised the allocation of scarce police and judicial resources to the prosecution and judicial processing of minor cannabis offences (e.g. Kaplan, 1970). The fact that prohibition is an expensive policy to pursue, coupled with a belief that it has not been successful at reducing cannabis use, has led some countries to consider alternative policies that are believed to result in lower overall societal costs (Senate Standing Committee on Social Welfare, 1977; Canadian Senate Special Committee on Illegal Drugs, 2002). Most of the alternative models that have been tried to date are models that retain a prohibition on the sale/supply of cannabis but reduce penalties for possession and use. They therefore eliminate the costs associated with enforcing a prohibition against users but retain the costs associated with enforcing a prohibition against supply.

Although there is general agreement among its critics that prohibition is an expensive policy, there is surprisingly little information on the costs of implementing it in any country. In fact, in a recent summary of cannabis policies in Europe, Australia and the United States, the Canadian Senate Report was unable to identify any studies that could quantify the total cost of prohibiting the supply and demand of cannabis for any of the countries it examined (Canadian Senate Special Committee on Illegal Drugs, 2002). Instead, estimates were made by attributing some fraction of the total drug budget for a country to cannabis prohibition. For reasons discussed below, this type of estimate presents a very poor assessment of the real cost of prohibiting cannabis sale and use.

In the absence of any good estimates of the cost of prohibiting cannabis we should not assume that these costs are trivial. Indeed, estimates have been made of the costs of enforcing specific aspects of prohibition, such as adjudicating and imprisoning offenders. These suggest that the cost of enforcing the prohibition may be very high.