The Cost and Benefit of Legalization of Marijuana
How it works
In recent years, marijuana has become a controversial topic, and the United States government has been struggling to find a solution for the legalization of marijuana. Some argue that the government should legalize marijuana because it is less harmful than alcohol and tobacco. They also believe legalizing marijuana will decrease crime rates, especially drug trafficking. It is because marijuana is illegal in most states, and its penalties are often quite harsh, which can deter people from committing related crimes. Others argue that legalizing marijuana would only increase crime rates and make the drug more accessible to children and individuals who want easy drug access without committing a crime (Newman, Mason, and Langenderfer, 2021, p.
1173). This paper focuses on the costs and benefits of marijuana legalization by evaluating them alongside the consumer, producer, and government. It helps restate some of the confusion surrounding the issue today.
Cannabis has been controversial for decades, with many states deliberating whether or not it should be legalized. After the 2016 U.S. election, 29 states have legalized medical marijuana, along with nine states and Washington, DC. Cannabis legalization has increased the industry, creating 123,000 new jobs around the country (Hall, 2020, p. 285). The various states that have legalized the drug have considerably impacted employment in years past due to their cannabis business. Legal cannabis use has been rising for a few reasons, but one major factor is understanding its safety and benefits. Not only is it medicinally superior, but it is also safer and less addictive than legal drugs such as alcohol and tobacco. Hall (2020, p. 283) states that Monitoring the Future researchers reported in 2014 that marijuana usage amongst 8-12 graders had dropped significantly over five years. They found a 52.4% proportion of high school seniors smoking marijuana in 2011, whereas by 2017, 36.1% of seniors were still using it. However, the drug is reported to improve job productivity among various individuals. Several factors contribute to this significant decline, including the frequency with which these individuals are fulfilling their job requirements, their hard work ethic, and the fact that these positions provide for legal cannabis.
It can be difficult for the government to collect taxes on illegal drugs because these substances are often untaxable. It leads to a government revenue drop, causing more strain on public financial services and treatment. According to Jorgensen and Harper, 2022, p. 374), sales of recreational marijuana in Colorado generated $506 million in total tax revenue for the state between 2014 and 2017. This figure is just for Colorado, and it is not even considering sales happening elsewhere in the country. Colorado’s marijuana industry has grown exponentially in recent years, and that money is now being used to improve the quality of life for many citizens. As a result, they have implemented various ways to end the state’s opioid epidemic and are taking care of mental health situations. It has become easier to apply for marijuana dispensary licenses, which is good news for the local community. With the rising homelessness rate in Aurora, city officials are starting to take action, and this impacts people across the lifespan of individuals. Money has also been given to Comities Crisis Center and Aurora Mental Health for the van. They will be able to hire more care workers due to this purchase. The homeless that participate in the walk-in center is capable of getting help from external resources with their housing and job search. With this resource, employees can assist these needy individuals more efficiently.
When marijuana is legalized, it generates an income that can promote full-time jobs that pay approximately $45,000 annually (Miron and Soares, 2022). When the broader view of legalization is considered, it seems that marijuana has more benefits than costs. Aurora provides evidence of what money made from marijuana can do: it can create a community that most likely was once associated with an unwanted population group but is now thriving and normalized. Despite the city of Aurora not giving back to the community, it is doing good. The city has made money from legal marijuana and has given that money back to the people in this area. It proves that a community can have another benefit besides making money if done correctly. The legalization of marijuana has opened a whole new market to create jobs, which decreases unemployment and helps those in need of healthcare. However, it is not an oblivious reality that increasing sales will increase taxes and cause price increases on the product. Progressively, marijuana is increasingly decriminalized in most states, but the effects of this ban are still being felt in other ways. Many people who use or produce it are considered criminals, which suggests that using marijuana makes a person commit crimes. Nonetheless, no evidence buying marijuana from black market dealers will stop the crime and violence associated with its distribution. Many people who want to purchase marijuana would go through dispensaries or get a medical card if marijuana is not criminalized. It makes more sense for your regular marijuana business to remember that you need to be professional. Crime-related data on marijuana shows that the use of it is higher among people who commit a crime.
One would not necessarily believe that if the black market were eliminated, felony-related crimes would always result in a decrease. Police have their hands full with drug tests, not simply because they do not trust people’s ability to lie. Cannabis use can indeed affect a driver, just like drinking alcohol. Driving under the influence of any substance is dangerous since it impairs your judgment. However, considering the annual per capita cost of vehicle collisions, the percentage of users likely to drive under the influence of marijuana would be low if the drug is legalized. Marijuana may improve productivity, but it is not recommended to use it at all times. It is also important to note that drinking alcohol and being drunk are not allowed in the workplace either. Employees are asked to show up to work sober, and employers have the right to fire people who fail to obey that requirement. Employees must stay healthy and pledge to do whatever they can to succeed at their job. Notwithstanding, marijuana legalization does not mean you can drive recklessly or crazily.
Consumer surplus is the amount consumers are willing to pay for goods in a particular market. If marijuana increased on the market, this would increase consumer surplus and usage. People are willing to pay higher prices for products that provide a risk premium of getting caught with marijuana. It has been a long-debated issue in the United States, but with more and more states legalizing marijuana, it looks like legalization is coming. According to Hollenbeck and Uetake (2021, p. 576), the rising demand for marijuana will increase the states’ taxation on marijuana sellers and producers to increase the current level of revenue. However, at the same time, a deadweight loss, which is a loss in economic efficiency, can also occur when equilibrium is not achieved. Legalizing marijuana has a detailed positive impact on the market, and while it comes with some adverse effects, they are relatively small when all costs are accounted for.
Ultimately, black market marijuana prices would be monitored by the government to ensure they stay at pre-legalization levels, and law enforcement would continue to pursue felony crimes aggressively. It will significantly impact communities that provide financial assistance to those in need and help the citizens of these communities dramatically. Therefore, legalizing marijuana does have some benefits for the community and country.
- Hall, W. (2020) “The costs and benefits of cannabis control policies,” Dialogues in clinical neuroscience, 22(3), pp. 281–287. doi: 10.31887/DCNS.2020.22.3/whall.
- Hollenbeck, B. and Uetake, K. (2021) “Taxation and market power in the legal marijuana industry,” The Rand journal of economics, 52(3), pp. 559–595. doi: 10.1111/1756-2171.12384.
- Jorgensen, C. and Harper, A. J. (2022) “Examining the effects of legalizing marijuana in Colorado and Washington on clearance rates: a quasi-experimental design,” Journal of experimental criminology, 18(2), pp. 365–386. doi: 10.1007/s11292-020-09446-7.
- Miron, J. and Soares, P.B. (2022) ‘Legalized Marijuana,’ The Milken Institute Review: A Journal of Economic Policy, 1 July. Available at: https://search-ebscohost-com.libraryresources.columbiasouthern.edu/login.aspx?direct=true&db=edsinc&AN=edsinc.A713228551&site=eds-live&scope=site.
- Newman, C. L., Mason, M. J. and Langenderfer, J. (2021) “The shifting landscape of cannabis legalization: Potential benefits and regulatory perspectives,” The Journal of consumer affairs, 55(3), pp. 1169–1177. doi: 10.1111/joca.12387.