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Marijuana republic sounds awkward. Can we just call it a cannabinocracy?
Could just call it The High Country, given it's lack of mountains.
Ganjawana Land.
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"United Nations officials say no other country has seriously considered creating a completely legal state-managed monopoly for marijuana or any other substance prohibited by the 1961 United Nations Single Convention on Narcotic Drugs."

I thought Morales in Bolivia was doing something with coca production?

And as Brennan mentioned above [1], what about Portugal?

[1] http://news.ycombinator.com/item?id=4314916

Because Portugal didn't "legalize all drugs" as he posted. That's a common misconception, but very far from reality. The only big difference in Portugal from the rest of the planet, is that the drug user is treated like a medical patient and not a criminal. So you're ordered to go to a rehab instead of going to prison. But it's just as illegal as anywhere else. The word "decriminalization" causes a lot of confusion since it can mean a lot of different things.

http://en.wikipedia.org/wiki/Drug_policy_of_Portugal

> The only big difference in Portugal from the rest of the planet, is that the drug user is treated like a medical patient and not a criminal.

You should read about Switzerland's policy on heroin. Special clinics, perscriptions, available clean needles everywhere, professional staff (and AFAIR many members of public facing professions) medically trained to perform injections in case an addict needs one but isn't phisically able to do it himself, etc. Somebody who knows better can probably expand on the details, but there's a complex multi-layer policy on drugs, from prevention and harm reduction to quality control.

Ironically, smoking joints is technically illegal and the latest try to do it didn't pass the referendum, however, the fines aren't that drastic according to wiki https://en.wikipedia.org/wiki/Cannabis_in_Switzerland

The government does not produce drugs, people are just allowed to have individual doses. Nooone is allowed to be a producer or to sell.
Last summer Portugal released a bunch of information about its decision to legalize all drugs 11 (was 10 at the time of the report) years ago. Crime, addiction, and traffic were all down and rehabilitation rates (courts can mandate rehab but not prison) were way up. The U.S. certainly isn't going to be a leader here, but here's to hoping it will eventually be a follower.
Legalize != decriminalize. Portugal did the latter.
if it's not criminalized how is it still illegal?
I have a personal theory that many countries want to do this and eventually legalize. I think they're following these experiments closely and developing policy along these lines.
Considering that:

1) Drugs for recreational activities such as tobacco and alcohol have very well known harmful effects, even when consumed in small dosis.

2) There are 0 annual casualties from the use of Marijuana, you just can't overdose to death on it, and it has lots of medical and non-medical uses.

Can someone tell me why it was criminalized in the first place?

Things don't have to be lethal to be undesirable. Porn, TV, junk food, all are not legal but still undesirable things.

I think smoking pot in the morning is as bad an habit as watching 3h/day TV. In the sense that I would shoot at him if my little brother did one of those. Ago the argument for decriminalization should be more in the line of: let people choose their bad habits.

Wanted to edit but server was down and now I cannot edit anymore: s/shoot/shout/ s/Ago/And s/legal/lethal
(1) It was smoked by Chinese railroad workers and used as an excuse for how "lazy immigrants" were taking American jobs

(2) Hemp fiber was a serious competitor to synthetic fibers being produced by chemical companies.

(3) Henry Ford had built a car entirely out of hemp, and then used hemp as the fuel for the car in order to demonstrate how viable the product could be for the automotive industry (which threatened big oil).

(4) Harry J. Anslinger & William Randolf Hearst and their support from dupont, big pharma, the timber industry, and their control of the media and representation in politics.

There's really so much to the story that it's nearly impossible to write it all down in one place, but it's a subject that's definitely worth researching.