Salt Lake Community College

Legalization of Marijuana

Maria-Elena Maddocks ECON-2010-044 Microeconomics Dennis R. Wilson December 5, 2013

Maria Maddocks

ECON 2010 Microeconomics Term Paper

Legalization of Marijuana

The topic of marijuana legalization has recently become a widely debated matter. Smokers and nonsmokers alike have passionate views when it comes to the subject. With the idea of legalization becoming more and more realistic, people are seeking answers to their questions regarding the subject. Do the pros of legalizing marijuana in the states outweigh the cons? The resolute answer is yes. When comparing the marginal benefits to the marginal costs of legalization, it is clear to see why the answer is in favor of the government turning this concept into reality. First, and most importantly, of all, legalizing marijuana for medical and recreational use will result in a better economic standing for the United States. The economical state of the country has been declining for some time, and the future looks bleak. In terms of just tax revenue, the United States stands to gain an amazing 8.7 billion dollars annually for federal and state spending if marijuana is legalized. This is just the amount of money that will be saved from actively enforcing the war on drugs; which includes arrests, prosecutions, and incarcerations of individuals of marijuana related crimes. This act would greatly reduce government spending. Washington alone projects to generate around 1.9 billion dollars in additional revenue over the next five years because of legalization (Fairchild, Caroline, Legalizing Marijuana Would Generate Billions In Additional Tax Revenue Annually, The Huffington Post, April 20, 2013). Colorado is another example that shows how lucrative legalization is; each sale of marijuana has a 15 percent excise tax as well as a 10 percent sales tax in the state (Battle, Derrick and Pinkston, Zachary, Marijuana

Maria Maddocks

ECON 2010 Microeconomics Term Paper

Legalization Pros/Cons, Liberty Champion, October 22, 2013). With a 25 percent total tax on each sale, there is a lot of revenue to be gained in the industry. Cannabis is Americas number one cash crop, regardless of its legality. Actually, it is the number one cash crop of North Carolina and California, as well as a dozen other states (Ghosh, Palash, The Pros and Cons of Drug Legalization in the U.S., International Business Times, October 19, 2010). This is due to its obvious use, as well as the abundant 25,000 products that can be made using cannabis. The alternative uses of the plant include producing paper, geotextiles, construction and thermal insulation materials, and various other products. The United States could use the plant to replace more finite materials currently being used (Messerli, Joe, Should Marijuana be Legalized under any Circumstances?, Balanced Politics, August 6, 2011). Another positive outcome to legalization would be a reduction in crime in the United States, and ultimately the world. At the Sixth Summit of the Americas in 2012, numerous Latin American leaders brought up legalization and regulating drug markets to cease the drug cartel-related crimes from afflicting their countries (Moreno, Carolina, Drug Legalization: Pros And Cons As To Its Viability As A Means To End The Drug War, The Huffington Post, August 28, 2012). Legalizations will force drug lords out of jobs and will regulate who sales the drug. This will stop the drug wars between competing cartels. It will reduce the amount of crimes that innocent people are involved in as well, be they users of the drug or not. There have been over 30,000 people who have been killed at the fault of Mexicos drug wars (Ghosh, Palash, The Pros and Cons of Drug Legalization in the U.S.,

Maria Maddocks

ECON 2010 Microeconomics Term Paper

International Business Times, October 19, 2010). By keeping marijuana illegal, dangerous criminals are allowed to flourish in their business. On the subject of crime, legalization of marijuana will result in freed time and revenue for the police force and judicial system to address the pertinent issues that are pushed aside for marijuana related crimes. It would also repeal charges such as possession or paraphernalia, as well as smuggling and selling charges. In 2008, states spent around 25.7 billion dollars on drug prohibitions. Legalization would save in prosecutorial, judicial, and incarceration expenses as well as time spent on a futile attempt to thwart the use of the drug (Ghosh, Palash, The Pros and Cons of Drug Legalization in the U.S., International Business Times, October 19, 2010). Control of illegal drugs has been failing for some time. Prohibition doesnt work. History has shown this in the case of alcohol. Regardless of marijuana being legal or not, people are still going to purchase and use it. Instead of taxing the purchase and the revenue going to the government, the money from marijuana sales is going directly into the hands of violent drug leaders that are not contributing to the good of society. Also with legalization comes education and regulation. While marijuana remains illegal, people purchase the drug without knowing where it was grown or if any external chemicals are being laced in. There is no way to prove how organic and natural their purchase is. This is a health hazard to unknowing consumers. If marijuana is legalized, the government will regulate where the plant will be harvested and what, if any, chemicals are involved in the process; the FDA can control the safety and quality of the drug. With the government's involvement, there will not be a question of the integrity of the product. There are many

Maria Maddocks

ECON 2010 Microeconomics Term Paper

misconceptions from those who attack the drug simply because it is illegal. Another positive effect of legalization is that the knowledge regarding marijuana will be clear and factual. There are an innumerable amount of unreliable sources that many individuals get their information from regarding the drug. In terms of the marginal cost of legalization, the main issue is with the adverse health effects that could possibly affect users of marijuana. The biggest dispute against this issue is that the studies done on health effects of marijuana use have never been completely proven. There are studies that indicate marijuana can lead to brain damage, cancer, lung damage, depression, and amotivational syndrome, but still there has been no solid proof (Messerli, Joe, Should Marijuana be Legalized under any Circumstances?, Balanced Politics, August 6, 2011). Without yielding concrete findings on years of medical research done on the subject, the health dispute is not a valid one. Many nonusers of the drug worry about secondhand exposure, but, like tobacco, with legalization there will be laws that prohibit public smoking. Ultimately, it is a persons sole right to choose what they want to take in their body. Regardless of possible health risks, it is their decision to choose to use the drug or not. Keeping marijuana illegal is a violation of that right. Another concern of legalization is the risk of users driving while under the influence of the drug. To address this issue, the police force only needs to enable a system of testing those they believe to be driving high. Just like with alcohol, there needs to be a limit as to how much marijuana is an acceptable amount to not impair driving. Colorado and Washington have developed the five-nanogram-per-milliliter rule to help with this as well as incorporating various tests that check for time and depth perception, coordination, and

Maria Maddocks

ECON 2010 Microeconomics Term Paper

other psychomotor abilities that are impaired with use of cannabis. People will still use the drug and drive, but with legalization methodical ways to test for THC impairment will be more ardently developed (Dillow, Clay, How Will Police Regulate Stoned Driving?, Popular Science, June 4, 2013). Lastly, those who advocate keeping marijuana illegal are worried about the drug leading a user to use harder drugs. Marijuana users are actually less likely to jump to harder drugs than tobacco users. There have even been studies that have shown how marijuana has been used as a substitute for alcohol. The drug seems to have a sharp decline in users after the age of 21, indicating that those young adults substitute alcohol for marijuana until they are of age. With legalization there may even be a drop in alcohol consumption. Research has found that after enacting medical marijuana laws there was a 13 percent decline in traffic accidents and violations; marijuana impairs driving less than alcohol does which could attribute to this decline (Sullum, Jacob, Economists Predict Marijuana Legalization Will Produce Public-Health Benefits, Forbes, November 1, 2013). When comparing the marginal costs and benefits of legalization, it is very clear to see why legalization is beneficial to the economy and society as a whole. The decision is ultimately up to the United States government, but one can see that there are many advantages that can be reaped from legalization; regulation of the drug will result in saving money for the government and the consumer, a reduction in crimes from violent drug dealers and Mexican drug cartels, a reallocation of police and judicial resources, safer and regulated plant production, and finally factual education on the topic. Legal distribution and taxation of marijuana is a hopeful reality of the near future.

Bibliography

Battle, Derrick and Pinkston, Zachary, Marijuana Legalization Pros/Cons, Liberty Champion, October 22, 2013, http://www.liberty.edu/champion/2013/10/marijuana-legalization-proscons/

Dillow, Clay, How Will Police Regulate Stoned Driving?, Popular Science, June 4, 2013, http://www.popsci.com/science/article/2013-05/now-recreational-marijuananow-legal-two-states-how-will-police-regulate-stoned-driving?page=0%2C1

Fairchild, Caroline, Legalizing Marijuana Would Generate Billions In Additional Tax Revenue Annually, The Huffington Post, April 20, 2013, http://www.huffingtonpost.com/2013/04/20/legalizing-marijuana-taxrevenue_n_3102003.html

Ghosh, Palash, The Pros and Cons of Drug Legalization in the U.S., International Business Times, October 19, 2010, http://www.ibtimes.com/pros-cons-drug-legalization-us246712

Messerli, Joe, Should Marijuana be Legalized under any Circumstances?, Balanced Politics, August 6, 2011, http://www.balancedpolitcs.org/marijuana_legalization.htm

Moreno, Carolina, Drug Legalization: Pros And Cons As To Its Viability As A Means To End The Drug War, The Huffington Post, August 28, 2012, http://www.huffingtonpost.com/2012/08/28/drug-legalization-pros-cons-drugwar_n_1834417.html