Should Your State Legalize Pot?

Alden Wicker

Forget 4/20. The celebration might come early this year for those who enjoy smoking pot, and not just for medical purposes.

We’re talking about November 6th, when voters in Colorado, Washington and Oregon will vote on measures that would allow the regulated production and sale of marijuana not for medical but for recreational use.

If any one of these three initiatives passes, this would represent a sea change in policy. Currently, no states allow marijuana for recreational use, though 17 states and the District of Columbia allow its medical use. But many think decriminalizing possession of marijuana and even encouraging it as an industry are long overdue. A 2011 Gallup poll found 50% of Americans favor legalization and only 46% oppose it.

So what are the arguments in favor of legalizing marijuana? Surprisingly, individual freedom is rarely evoked. Instead, proponents cite a wide range of practical considerations. But is it all hype, or would legalizing marijuana, perversely, do some good?

In our latest of several “What would legalization mean for the economy?” (The first being gay marriage and then more immigration) stories, we break down the economic effects of legalizing pot.

The Pot Industry Right Now

In case you hadn’t noticed, there’s already a booming marijuana economy, but the profits don’t benefit any Americans. Currently, Mexican cartels capture 70% of the profit from selling marijuana.

Marijuana’s illegal status makes it hard to measure the drug’s economic impact, but estimates put sales of the green at around $10 to $40 billion. Some analyses, which are based on the amount of pot produced instead of estimated sales, put the number as high as $120 billion. In fact, marijuana is the top cash crop produced in 12 states.

What Happens If We Legalize It?

It’s almost impossible to guess what legalizing pot for recreational use at the federal level would do for the economy in hard numbers for these reasons:

  • We can’t estimate how many people currently buy weed
  • We don’t know if weed consumption would overall rise or fall if it were legalized
  • The price of weed could drop as it becomes easier to obtain, or rise as it is heavily taxed

Despite the haziness (pun intended) surrounding pot, marijuana could be a boon to states. “You can basically take advantage of economies of scale, and the price of marijuana will go down and government can come in and capture the difference,” Christopher Stiffler, an economist at the nonpartisan Colorado Center on Law & Policy, told MSNBC. So if an ounce is $250 under the current scheme (we got this price off the internet, not from personal experience), and it drops to $150 because there aren’t five middlemen (read: drug dealers) in between production and sale, then the state can tack on a $100 tax.

Better Than Alcohol!

But would it be a net win? It’s helpful to look at two other industries that provide the model for regulating pot. Currently, taxing alcohol and tobacco brings in only $1 for every $10 incurred by society from related costs, involving everything from law enforcement to car crashes and liver disease. For instance, state, local and federal governments spend $72 billion a year just dealing with alcohol abuse alone.

But legalizing a formerly illegal substance also brings cost savings, primarily in law enforcement costs, which for marijuana are estimated to cost $7.7 billion a year.

$72 billion in societal costs minus $7.7 billion in savings? It looks like the numbers are in the negative territory for legalizing pot. But it’s not as easy as comparing weed to alcohol. Alcohol is actually more addictive and physically harmful than marijuana, believe it or not. And given the fact that many teenagers say it’s actually easier to procure pot than alcohol, we’re not likely to see a giant surge in societal negative effects of marijuana as people who had been really wanting to try it–but dissuaded by harsh laws–rush to dispensaries.

Finally, across states who’ve legalized medical marijuana, there’s been a 9% drop in traffic fatalities, which researchers attribute to people replacing alcohol with marijuana–leading to the conclusion that legalizing marijuana could actually save on societal costs.

This isn’t all pure speculation. To see a real-life case of what happens when the pot industry is allowed to flourish, we can look to Colorado.

Cheetos Consumption Soars in Colorado

Just kidding. We made that up. But in all seriousness, Colorado is already halfway to complete legalization. Voters approved allowing medical marijuana use in 2000, but the industry didn’t take off until the federal government signaled it would stop raiding dispensaries in 2009. Now about 100,000 Coloradans carry what are known as “red cards” entitling them to buy marijuana.

Opponents of legalizing marijuana worry that legalizing the drug would increase use by minors. But a study from the Center for Disease Control and Prevention examining trends related to marijuana consumption between 2009 and 2011 showed marijuana usage among Colorado teens dropped, even while nationally, marijuana use by minors rose.

A report by the Colorado Center on Law & Policy estimates that passing Amendment 64, which would legalize pot and regulate it like alcohol and cigarettes, could raise millions for the construction of Colorado public schools, produce hundreds of new jobs from construction of those schools, and produce $60 million annually in combined savings and new revenue for the state budget.

No wonder a majority of voters in Colorada now favor going all the way. Polls have found that up to 61% of residents are in favor of Amendment 64.

And for Everyone Else?

There are hints of what’s to come from outside Colorado, too. Initiative I-502 in Washington, which would create a closed seed-to-store, state-regulated monopoly, could raise an estimated $560 million in taxes. Eventually, there could be as many pot shops as liquor shops in the state.

Another 2011 study from researchers at Montana State University and University of Colorado Denver surveyed 16 states that have passed laws legalizing the use of marijuana, and found no increase in use by minors, though it did find an increase in adults. Finally, in the Netherlands, where pot is sold legally through coffeeshops, minors are less likely to try pot than they are here in the U.S.

The NAACP has come out in support of these state measures, because of the disproportionate number of blacks who are arrested and incarcerated for marijuana use. This is despite the fact that white young adults aged 18 to 25 use marijuana at a higher rate, according to the U.S. Department of Health and Human Services.

The Big Hiccup in the Plan

A transition to a legalized recreational pot economy might not be smooth. Even if a state legalizes marijuana use, it’s still illegal on the federal level. When Proposition 19, which proposed to legalize and regulate recreational marijuana, was up for vote in California two years ago (it was defeated), federal regulators indicated they would “strongly enforce” federal laws against its use, though they’ve been mum lately on what they would do if any of the three current state initiatives pass.

Romney has spoken against recreational pot use, while Obama (who has admitted to smoking when he was young) has said he doesn’t think legalization is the answer. (He used to some years back.) Some have speculated he might surprise everyone and make it legal on the federal level as a move to boost his election numbers, but he only has a month left to do so. Or … if he wins the election he could “spike the football” by making it legal. Who knows?

What Do You Think?

Do you live in one of the three states with pot initiatives on the ballot? Or would you support or be against an initiative in your own state? Let us know in the comments!

  • LeAnne

    There is no good reason why it shouldn’t be legal.  Moreover, if it is legalized, it can be taxed and regulated.  The income of the dealers can also be taxed. 

    Making something illegal makes it dangerous, so legalizing will decrease violent crime related to this illegal activity.  It is not less safe than cigarettes, alcohol, and many prescription drugs. 

    It is ridiculous that it is illegal in the first place!

    • Boogy Boogy

      Good point. Or many other things we could think of. 

  • I Say Yes

    Prohibition is an EPIC FAILURE. Always has been, always will be. We tried alcohol prohibition and all it did was create a thriving underground market run by criminals who ruled through violence and mayhem. Think violent crime is bad now? Back when alcohol prohbition was in effect, the US murder rate was actually HIGHER pro capita than it is now, and much of that was due to the criminal activity surrounding bootleg booze. Hmmmm….substitue “pot” for “booze” and “drug cartels” for “gangsters,” and it sounds like the exact same thing is happening today. Once again, we fail to learn from history.
    I am not a pot smoker myself because I have asthma, and work in a field where random drug testing is required. I don’t drink either, because I come from a long line of people who drank themselves to death, and I have seen firsthand the damage wrought by booze. I know people who drink, and I know people who smoke pot. The worst I can say about my pot-smoking friends is that they’re a little scatterbrained when they’re stoned, and they eat all my chips. On the other had, 10 years ago this month I was lying in a hospital bed with a serious concussion and a broken jaw, thanks to an ex-boyfriend who became violent and angry when drunk. 
    Contrary to the lazy & stupid stoner stereotype, the pot users I know are normal people who do normal things. They own houses, raise families, hold down jobs in normal fields like IT and accounting, and contribute to society. They just prefer to unwind with a joint or a bong hit instead of beer or wine. One of my pot-using friends is a professional drummer who tours with nationally known acts (including, ironically, several in the contemporary Christian circuit!) and is in high demand as a session player and teacher. Another started using pot while taking chemo for breast cancer. Her doctor actually recommended it because she was severely malnourished and literally in danger of starving because her chemo nausea was so bad, and no legal medicine could control it. Pot killed the nausea and brought back her appetite, and probably saved her life. She continues to use it to control chronic pain from surgery complications. It allows her to be pain free without turning into an “addicted vegetable,” unlike other cancer survivors she knows using legal narcotics for pain. (Another thing about pot: my pot-smoker friends really can stop using when they need to, without withdrawal effects. My drinker friends? Not so much.)
    In addition, everyone seems to be looking for the “next big thing” that could kick-start our economy into full recovery. In the 90s, it was the Internet. In the last decade, it was real estate. Could pot and hemp-related industries lead the next major economic expansion? It’s worth a try anyway…god knows nothing else is working.
    Legalize it. Regulate it. Tax it. Now.

    • WeAreOne!

      Alcohol was once prohibited aswell, this shall soon be acceptable aswell. I personally think from reading proven research on affects to the body that marijuana is definately not as negative affecting to the body as alcohol! It actually has many proven benefits to the body while alcohol as not one good benefit to the body. If America wants to make more money they will regulate it, tax it, keep people out of jail, reduce the accessability of it to teens being able to buy it off the streets.

  • Lucas

    At the least, hemp (the industrial use stuff, for rope, fabric, etc) is incredibly versatile, renewable, and exportable. Our archaic drug laws throw the baby out with the bathwater by making everything in the family illegal. I live in Washington, and I-502 takes a lot of sensible precautions to protect public safety (blood-thc levels for driving, similar to alcohol, for one). The taxation would be a boon for local and state governments running in the red, and it would create a viable export crop, rather than funneling money into foreign drug cartels with imports. It night even revive the textiles industry with easy to grow fabric materials. So many options!

  • happyvibes

    I think that legal sources would have a more reliable supply (not laced with some other horrible drug) and help keep users away from more dangerous drugs. We also need more education about the dangers of putting unknown substances in our bodies.

  • Croatoan64

    If we don’t legalize marijuana the mexican war could become disasterous. 70 percent of Grass comes through mexico. We have national guards on the border and advisors in mexico.
    Lets wake up?

    I used it in Viet Nam. But self policing among the troops lots on hiding and listening at night, we’d go nuts if someone brough beer along, yet, as a bunch of men(kids really) carrying loaded guns, we allowed grass with a gun, not alcohol.Guy drinking scared us all. Pot, dinky dow weed it was called was a common event  and was not a danger while carrying a gun.As far as we saw it.

    The real “gateway drug and slippery slope(?) is alcohol.That leads to hard drug use and prescription drug use.

    Families are being destroyed by removing brothers and fathers and uncles, the VERY THING we supposedly are trying to support simoultaneously.

    Then remove the created ex-con into a situation where he can’t get student loans, most of government “support” programs and voting rights.It weakens many family structures and produces MORE social problems.
    Like a factory that creates criminals.

    The mexican war could advance even further across the border where gun fights already take, in the border states.Legalization would stop it much….if we removed the abolition and taxed it.

    It is in our national interest that mexico does not become ungovernable and legalization of grass is a BIG step towards stopping the skirmishes and bringing the soldiers home.

    Repealing alcohol prohibition put the gangsters out of business.


  • T Thomas2

    Any time you let “government” in it is like the arab saying; “you let the camel’s nose inside the tent, before long the whole animal is inside”.  Personally, I’ve never used it, have no desire just like going to a casino.  As long as people do something that hurts no one, I don’t care.

    By the way, what are you going to do with all those anti-smoking laws on the books.  How offensive is that.  Just another way for the government to stick their noses into everything.

  • Boogy Boogy

    I think they should legalize this crap and tax it- but don’t tax it so damn high the users cannot afford it that would be counter productive- or stupid. The tax revenues can be used to pay bill’s in the communities that rely on government assistance. Since people are always crying about taxes- here is a proven cash cow. Continue to let the dealers sell and pay taxes on all forms of street drugs. 

  • PrincessTamera

    I don’t understand why an illegal drug should be legalized. I’ve known people who smoke dope (marijuana) & their reflexes are slowed down.  I wish there was a way to check for marijuana when they are involved in auto accidents & traffic stops.  I don’t like the way that dope smokers are unmotivated & smoke it around their kids.  It’s BS that it doesn’t cause at least lung damage like cigarette smoking & I hate to think of what they’re doing to their brains.  But I guess we should let them kill theirselves if they want to.

    • Calamity Jean

      The reason why marijuana should be legalized it that the laws against it are much more harmful to the user and to society than the use of the drug itself.  Putting marijuana users in prison is like cutting off a three-year-old’s fingers because s/he was picking his/her nose. 

      This may or may not be true of other illegal drugs, but the subject under discussion is only marijuana.

    • Raginazn

      Again, people will smoke “dope” if they want to, your not keeping it off people’s hands by making it illegal. Look at the alcohol prohibition, people still drank… we just had to pay cartel’s and gang members to do so. On top of that, we have to pay billions of dollars to jail these minor offenders to still in there. So why not legalize it, regulate it, tax it? Marijuana’s effect on people are less worse than alcohol, it will create a steady stream of tax income and the best of all it’s the fastest growing bio-material on the planet… that means no need to cut down trees for paper or grow cotton for clothes, hemp is the way to go!!!

    • jway

      You know people who smoke marijuana? How is that possible, marijuana’s illegal and has been so for more than SEVENTY years. Are you suggesting that the federal marijuana prohibition DOESN’T WORK?

      If it doesn’t work then why are taxpayers forced to pay $40 Billion-a-year to fund it? And why are we forced to accept the 800,000 needless arrests & 10,000 brutal murders each year that the prohibition causes when it doesn’t even stop CHILDREN from getting marijuana?

  • Calamity Jean

    If you’d like to see cannabis legalized, don’t bother telling each other.  Write the govenor of your state, and your state legislators.  Write your senators and congressman in Washington D.C. also.  Nothing is going to happen until the politicians feel some pressure. 

  • jewels

    I see many positives to legalizing the use of marijuana. However, how would the government help children (and unborn) who are in houses of marijuana use? Kids already have a slew of respiratory disorders from 2nd hand tobacco. What about brain cell killing and inhaled marijuana use? 

    This is where I get lost.

    • jway

      Those people are already smoking marijuana. The prohibition *isn’t* stopping them. And if we use that argument to keep marijuana illegal then why don’t we use it to make tobacco illegal? Where’s the consistency in our laws??

  • jway

    We keep hearing about “legalizing marijuana for recreational use”, but what it really appears to be is an attempt to legalize marijuana as a far safer alternative to alcohol.

    According to the CDC, alcohol kills 80,000 people every year in the U.S. while marijuana kills none, and marijuana’s addiction potential is only about that of coffee. 

    Since marijuana is far safer and far less addictive than alcohol, we could GREATLY reduce the amount of harm and addiction in society by giving people the right to switch from the more harmful drug, alcohol, to the less harmful drug, marijuana. And legalizing marijuana like beer and wine will protect our children from a needless, and devastating, marijuana arrest. 

    Paranoid old men in the federal government are keeping marijuana illegal and making our children LESS safe!

  • txpeloton

    Look at the law. Marijuana is a term with an abstruse, racist, 104 word definition. Demand this simple definition of marijuana which actually shows respect for our Constitution:
    16. The term ‘marijuana’ means all parts
    of the smoke produced by the combustion
    of the plant Cannabis sativa L.
    For more information, google Talking Points for the Peloton.