Marijuana: The Marginal Costs and Benefits of Legalization

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1 Microeconomics Term Paper-Econ 2010 Marijuana: The Marginal Costs and Benefits of Legalization Tawnie Hodges Wilson December 11, 2016 Weed, Grass, Herb, Green, Bud, Ganja, Mary Jane, Pot, Chronic, Kush, Cannabis...whatever you want to call it, Marijuana has been a largely debated subject for years, particularly on the legalization, and the pros and cons of the most recreationally used drug in the world. Many people have called this a gateway to other drugs, and have written it off to be The Devil s Lettuce. Others have called it a gift from mother earth, and it has blessed them with clarity, or relief, and have credited cannabis for enhancements in some form or another. In my opinion, I think it s to each their own, and I would be fine to see marijuana being legalized. My main reasoning is due to the economical impact, and that the health facts have far outweighed some common misconceptions. The latter is for a different debate, but here, I will be attempting to illustrate the economical beneficial factors with the legalization of this plant. I always predicted that the legalization of it would benefit the economy on a large scale, mostly because of the popularity of it, but I never really knew the ins and outs of it. I was

2 surprised to see how my prediction was not only confirmed, but my findings exceeded my expectations in where the economical growth would be, versus how it is now. I was surprised to see exactly how popular it actually is, how it would benefit America s economy, immigration, consumers, etc. Frankly, if we planted, our economy would bloom-pun intended. I was amazed to see how all people, whether they used marijuana or not, could benefit from the economical aspect of recreational (and medicinal, but that s for another time) use of marijuana. Let s take a look into the basics of marijuana, and some of its effects. Marijuana use has been defined as the preparation of the cannabis plant to be used with the intent of a medicinal treatment, or as a psychoactive drug. It has been used for the mental and physical effects, such as a feeling of euphoria, a stoned feeling, or an increase in appetite. Medicinally, it has been used for chronic pain, muscle spasms, or increasing an appetite for those with HIV/AIDS. It s dried, shredded, and rolled into joints, or pipes. It can also be consumed as an ingredient in baked goods, as well as a few other ways. Because it s easily accessible, less expensive than other illicit drugs, and the fact that it rarely leads to addiction, or serious mental or physical incompetencies, it s the most used illicit drug in the world. As of November 11, 2016, 26 states, and the District of Columbia have legalized marijuana in some form or another-recreationally, or medicinally.

3 Now, let s explore the economical aspects of it. Before the legalization of it, I really thought the market would only have so much of an effect. It attracts a certain type of crowd, it won t be THAT big, etc. As it turns out, cannabis has been a stronger economic driver than 90 percent of the industries active in Colorado. Legal marijuana has created 18,005 full-time jobs, and added about $2.4 billion to the state s economy last year. This is just in Colorado. That s not to say that marijuana is inexpensive by any means, to say, the typical college student, or even a high school kid. Retail prices range from $280-$420 per ounce. Compared to a cost of $3,200 per ounce of heroin-which is an inexpensive price for that, marijuana is obviously the more economical (and safe) option. Another economic standpoint to look at has an immigration factor in it. While I m not going to go into an immigration discussion, I m going to point out some facts about how it s detrimental for the United States to have marijuana here, versus the usual smuggling from Mexico. Yes, Mexico is where the majority of cannabis in the U.S. comes from. The costs of this are outrageous, on top of the cost of the marijuana by itself. It s undeniable that marijuana is costly by itself. But what anti-legalization supporters also haven t realized that those costs not only cover the production and reproduction of the plant, but the large majority of it is actually covering the costs of smuggling the drug to where it can be bought. Because of this plant being illegal, many border patrol agents have been seriously injured, or lost their lives in their efforts to

4 abide by this. Tyrannical, and merciless drug lords will oversee production, and various districts live in fear. If we legalized cannabis in the United States, the force of the drug lords smuggling their product here would be eliminated, the border patrol could focus more on illegal immigration, and the costs would go down. This would benefit the customers as the smuggling cost would be eliminated. Consumers would benefit from this in any economic aspect, not just including marijuana. What people also have failed to realize, is that if pot was legally grown and distributed in the United States, then the revenues collected would stay in the United States, as opposed to going to shady dealers, or the black market. Of course, this would bring a huge marginal benefit to our economy. Because this would be produced on a larger scale, the prices would be lower, entrepreneurs could make a huge business out of it and a portion would go back to their local community. Look at tobacco and alcohol, the states and federal governments benefit from taxes on those, why not put a tax on marijuana? Funny enough, the war on drugs has been horribly detrimental to our economy. There has been a lot of time, money, and resources spent on said war. Tax payers have picked up an estimated $10 billion dollar tab per year on marijuana prohibition, of which has resulted in the arrests of more than 750,000 individuals per year. A whopping 86 percent of those 750,000 people were charged with possession only. That is 645,000 people that are sitting in jail, being paid for by our taxes, just for having marijuana on them. None of these cases were deemed as intent to sell, driving under an influence, doing malicious activity, causing violence, but purely just for having a bit of weed on

5 them. 645 thousand people that we are paying for with our taxes. Honestly, this disgusts me, because as a taxpayer, I would rather have those jail cells, my tax money, that time, go towards people who are actually causing harm to others. 750,000 people per year are detained for marijuana-86% of that is possession only, which is far more than the total number of arrestees who are doing time for murder, rape, aggravated assault, and robberies combined. Serial killers, rapists, thieves, and violent people in general are more deserving of that time, the county jail, and tax dollars spent for that punishment. Our police officers and other law enforcement agents could definitely spend their time in more productive ways, than detaining a couple of stoners who just want to relax with some friends and pass a joint around. Understandably, the responsible usage is questionable, and there are a few regulations that should be put into play. Because marijuana deals are generally black market, without any regulations, a dealer is not likely to abide by any regulations regarding who is of responsible age, and who is not. In Utah, you have to be 19 to purchase cigarettes or other tobacco products, and 21 to even enter a liquor store, or purchase liquor. Just as these stores require identification, marijuana distributors should also enforce certain regulations and restrictions. Much like the same idea of alcohol or tobacco, hopefully this would result in more responsible usage among consumers. Conclusively, marijuana, ganja, weed, mary jane, chronic, kush, pot...it s all going to be smoked, eaten, vaporized, whatever you do with it, anyway. Look at the 750,000 people

6 who were jailed for it. Personally, I ve never purchased marijuana, and I ve got other responsibilities to take care of, and it s not worth the risk with it being illegal. In my experience, in my research, it s a harmless drug that can be used as a medicine. It s amazing what it has done for some people, and I think that the big stigma on it is that it was just deemed as illegal. There are plenty of legal prescription drugs out there that can be beneficial, but have been abused all the time, not to mention the fact that some of them have killed people, which is more than what marijuana has done. Xanax has benefited many people for its combat on anxiety, and people have died from it. Should we make that illegal? People have abused opiate pain killers, and most have used them because they just had surgery or an actual painful injury. Should we deny those who may benefit from them-the majority-just because of the irresponsibility of a small percentage of people? Because of the marginal benefits to bud legalization being significantly greater than marginal costs, I think our economy would skyrocket.

7 Bibliography economic-benefits-study-suggests-cb06831d154b#.lq20228vr lorado-final.pdf

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