Weeding Out Dirty Money: Cannabis Regulations and Financial Crime

This chapter wades into the contentious waters of cannabis regulations, specifically to interrogate potential links between them and money laundering. 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, we address the possible implications of such changes on the extent of money laundering. The chapter interrogates 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, we employ Walker’s Gravity model and use UNODC-reported prices of cannabis from 2003–2017 along with Australian Criminal Intelligence Commission reports to empirically validate the effects of cannabis regulations on the potential proceeds available for laundering. Several policy considerations are discussed in tandem.