General Question

Judi's avatar

What would be the economic impact of legalizing marijuana?

Asked by Judi (37655 points ) March 1st, 2009

Some are obvious, but when my hubby and I were discussing it we came up with some interesting “down the line” benefits like the bood to the agriculturial industry. I was wondering what your thoughts are positive and negatively on how legalization would effect the current economic situation.
By the way, I don’t smoke pot, nor would I if it were legal. Been there done that many moons ago.

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50 Answers

shockvalue's avatar

California would pull itself out of a deficit in under 6 months.

Judi's avatar

@shockvalue ; How do you see that? Tax revenue? Less law enforcement? Less overcrowded prisons? Any other ways?

essieness's avatar

The best place for that information is Norml. Here’s an article about the new bill introduced in California this week to legalize and tax it.

shockvalue's avatar

Tax revenue for the most part. But it would also free up time and money in the courts and law enforcement that has for years been negated in a feeble attempt to enforce a law what was created strictly under racist context.

Judi's avatar

What new industries do ya’all think would rise up?

essieness's avatar

@Judi Arresting and jailing marijuana smokers (and we’re talking about responsible smokers, not huge dealers) costs the taxpayers a LOT of money. Not to mention the amount of money spent on the “War on Drugs”. Those “Above the Influence” commercials aren’t cheap to produce, I’m sure. Then you get into the issue of actually taxing the stuff. I can’t think of the exact numbers, but I want to say they’re talking about taxing it at something like $50 and ounce (someone correct me if I’m wrong).

shockvalue's avatar

another plus: Marijuana would have to go the through the FDA, which means the chances of your drugs being pure (not laced) will grow exponentially. People can start their own localized agricultural industries, providing jobs into the economy. In the long run, EVERYONE saves money, and everyone else makes money.

Judi's avatar

You might also eleminate the entire business of the Mexican Crime lords!

shockvalue's avatar

That has been mentioned countless times when bills have been proposed. Most marijuana entering the united states is from Mexico or California. (in fact, according to Reefer Madness: Sex, Drugs, and Cheap Labor in the American Black Market, by Eric Schlosser, Marijuana is California’s NUMBER ONE export) If we legalize marijuana, and control it’s production and distribution, we can completely eliminate the massive revenue that is currently being filtered directly into the pocket’s of criminalized organizations.

Judi's avatar

It seems like such a no brainer. We’re stuck in prohabition. I would LOVE to hear the arguments against it. Maybe I should go to askville (shudder in fright!)

essieness's avatar

@Judi I listen to the Norml Daily Stash podcast every day and they do have clips on there of people arguing against legalization. When you listen carefully, the arguments against really don’t stand up to the arguments for. It’s not a gateway drug, it can’t kill you, it has legitimate medicinal uses… the list goes on and on. You’re definitely right, we’re stuck in prohibition. It didn’t work the first time and I have a good feeling it won’t continue to work anymore!

evelyns_pet_zebra's avatar

the downside would be people finding ways to make a buck off it, just like the anti-smoking Nazis did with cigarettes. Smoking marijuana isn’t any safer than smoking tobacco, despite what you may have heard. There is enough tar in the stuff to screw your lungs up over time. Smoking anything is detrimental to your health over time.

If I had the urge to do marijuana again, I’d stick to making it into tea or eating it in food. I used to like it that way. But I’m too old to do illegal drugs anymore. Let em legalize it, and we’ll see.

SquirrelEStuff's avatar

@evelynspet zebra

Thanks to vaporizers, marijuana can now be inhaled as a vapor rather than smoked. Since you are heating only the THC to it’s combustion point, no other harmful tars or carcinogens are being inhaled.
The volcano(google it) is a great way to safely smoke some good THC.

El_Cadejo's avatar

@evelyns_pet_zebra you cant make it into tea. THC is not water soluble so youd just end up with wet weed.

shockvalue's avatar

@uberbatman unless you steep your tea bags in hot butter!

…MMMMMMMMMM!

Triiiple's avatar

Amercia would be rich.

essieness's avatar

@Triiiple And pleasant.

El_Cadejo's avatar

@shockvalue yeaaaaaaa ill pass on that one lol. You could use milk however.

shockvalue's avatar

Haha no. Not really. I don’t smoke, I save my melted butter purely for a nice Darjeeling.

aprilsimnel's avatar

It seems to have short growing times and can grow just about anywhere, so perhaps it could be used as a food crop? I would imagine that there’s oils in hemp that could be used as food.

Judi's avatar

Yeah! I can’t wait to see what Dale says.

dalepetrie's avatar

I would look at alcohol and tobacco as models for both the good and the bad. The thing I see about it is that it would depend on how it was done. Start from an ideal standpoint, what could be if it were done 100% correctly.

- The government would have to get a good share of revenue, and the obvious way would be through taxation. The big problem with that is you then let the market set the price (which is what happens now), and throw taxes on top of that, this presents some problems, because that price point would not be the one that would maximize government revenues, nor would it take into effect the best interests of society. The best way in my opinion would be to nationalize the industry and study the market to determine what price point would provide optimum revenue with minimum social cost. We would have to recognize health care costs associated with this particular drug’s usage, which seem to be less than both the main legal recreational drugs. Price would certainly impact who uses and how much.

- Regulation would be the next big consideration, and we would have to set sane rules on regulating their sale and usage. Unfortunately, in this country, we don’t have a centralized way of handling many of these regulations. Yes, the FDA could provide optimal quality product and minimize safety issue, but in terms of usage, it’s really a state by state thing, though generally the government has used various tactics to make sure that states all play by generally the same rules. For example, you have to be 21 to drink anywhere, but what days and places you can buy alcohol, where you can consume it, etc. So the more we could bring regulation, distribution, pricing, enforcement and troubleshooting under one roof, the better off we’d be.

- Enforcement would be important here. I think this would present costs, but also opportunities for savings over current costs. What I mean is, you really would want to keep drugs out of the hands of whatever groups of people were banned from having them. You would also want to make sure that effectively the government was the ONLY pusher as it were, and the government would really be best served by making sure all potential users were educated about the risks as well. Currently our law enforcement focuses on keeping drugs from being sold illegally, and that would still be the case, but the market for illegal marijuana would be much smaller if legal marijuana were available to responsibile users. The motive for seling these drugs illegally (profit) would be much smaller, and therefore so would the number of suppliers (mostly it would be people who thought they could turn a profit off selling drugs to kids. Which is why part of the revenue derived would HAVE to be spent on education as well. Which is also a good reason for the government to control distribution….if there was no “profit motive” like there is with alcohol and tobacco. With those drugs, there is an incentive for the distributor to market to young people, as they will become tomorrow’s core clients. Companies that sell alcohol and tobacco only educate kids about the evils of these things when the government forces them to do so.

What I think it boils down to is removing the profit motive…from those who currently profit from it. Unfortunately, as long as there is demand (and you simply can NOT legislate morality, period), there will be people to supply it. The only thing that will eliminate a supplier is competition, i.e. undercutting it. So you would have to give distribution over to government, government would have to lower the price, not too much, but enough to eliminate the motive for other suppliers, but not so much that it would not be profitable. With some of the revenues we would have to tackle the demand part of the equation by making sure that the dangers were well publicized without glamorizing the positives, thus increasing the cost to society. And costs to society would have to be mitigated to the extend possible out of the revenues.

So, bottom line, it would be a HUGE revenue source, and would come with very large costs, but the costs would likely overall be lower than the costs of current enforcement, and added healthcare costs. Overall I don’t think legalization of marijuana alone would solve all of the government’s financial problems, Canada has legalized it, as have other countries, and its’ not like Canada’s streets are now paved with gold. It would be the morally and economically right thing to do, but it’s not the panacea I think everyone is making it out to be. You’d pretty much have to legalize ALL drugs (and take appropriate steps as described), and bring alcohol and tobacco under the regulation of the federal government to have the ultimate impact.

NaturalMineralWater's avatar

My salary would go up as all the potheads dropped out of commission. jk

TitsMcGhee's avatar

A slew of new businesses could open, both straight up marijuana retailers as well as hash bars, restaurants or bakeries that provide weed-infused food, and retailers that could sell weed smoking/consuming products (bowls, pipes, bongs, vaporizers, etc.). Talk about an economic stimulus :)

Ulmaxes's avatar

economically, I think it would be a boon in the short run. However, I see the same problem with it as I do with tobacco- money wise, it’s just common sense to let it go legal so we can get money out of it. yay capitalism.
However, there are serious health risks with marijuana, as with tobacco. It’s no secret that it’s no good for you. Advocating and legalizing something that is completely detrimental to a person’s health seems like a government that’s not doing much to serve and protect its citizens. Why don’t we make car crashes a legal sport? Or beatings from a loved one a form of stress relief suggested by 8 out of 10 doctors?
All these things could be taxed and legalized. Why don’t we? because they are bad for your health, to underplay it. Same thing with marijuana- it’s just not any good for a person; and how it will affect society as a whole is a whole other side to things. So, to me, legalizing and streamlining the system seems like a bad choice in the long run.

El_Cadejo's avatar

@Ulmaxes care to go in depth about these “serious health risks” . Marijuana isnt illegal because of the health issues. More along the lines of Harry J. Anslinger,WR Hearst, Henry Ford,Racism,Yellow Journalism, the paper industry…...the list goes on.

susanc's avatar

Yes, legalize-and-tax leads to huge new managerial problems. With simple decriminalization, though, prices would drop, because the costs of smuggling would go away; and the huge costs (fiscal and societal) of policing-and-jailing would be over.

But the policing-and-jailing industries create jobs. Taking jobs away won’t get our politicians re-elected.

@dalepetrie: According to Eric Schosser’s previous book, Fast Food Nation, there aren’t even enough FDA agents to inspect more than about 10 per cent of our slaughterhouses. So how can they add massive marijuana quality control…? ...oh wait, they could hire all the out-of-work prison guards! Those guys would be primo!

dalepetrie's avatar

@susanc -

#1 – there is no supply of workers these days
#2 – I read FFN, a good part of the problem isn’t that the FDA couldn’t inspect more than 10% of the slaughterhouses, it’s more that the Bush Administration pretty much put the captains of the agricultural industry in charge, so it’s not as it they’re toing to go after the funding they need to put teeth into the regulations that are going to destroy the industries profits in the long run.
#3 – Government doesn’t own the means of production and distribution for the agricultural industry, and therefore adequate funding has to come out of the general tax base. If all profits form the sale of marijuana went directly to the government, the FDA could inspect 100% of slaughterhouses AND regulate the distribution, production and sale of alcohol, tobacco and marijuana, and would have plenty of money left over.

Ulmaxes's avatar

@uberbatman I’m not really talking about why it’s illegal right now. I’m talking about (from what I’ve come to understand) why I think it should stay that way.
As for the health risks, I’ll get back to you on that. Mum’s a doctor-aside from her comments, I’ll get some hard evidence and post it.
Til then, a little research on the net would support my claims, I’d wager.

Waffle's avatar

I asked a similar question:
This is my theory

dalepetrie's avatar

I just saw I meant to say “shortage” not “supply” in my last quip.

helso's avatar

I smoke weed everyday but I think there would be a lot of problems if they tried to legalize it. Starting from workplace problems to social problems. If it were legalize people would bring it to there workplace. Smoking joints on the side of the street. But then I suppose they will just bring in laws saying you cant do those things >.>

El_Cadejo's avatar

@helso uh alcohol is legal but you dont really see many people drinking in work or as they walk down the road…..

TitsMcGhee's avatar

@helso: I second what @uberbatman said, and also, I brought weed to the workplace and smoke on the side of the street all the time, even though weed isn’t legal. Wouldn’t change much more for me. Also – if Amsterdam can do it, so can we.

shockvalue's avatar

IT’S THE DEVIL’S WEED!

TURNING OUR CHILDREN INTO HOOLIGANS AND WHORES!

TitsMcGhee's avatar

@shockvalue: I mean yeah, just look at me!

shockvalue's avatar

@TitsMcGhee BWAHAHAHAHA. Heard from that priest-to-be lately?

TitsMcGhee's avatar

@shockvalue: Psh, I didn’t give him my number! I gave priests up for Lent :D

Carol's avatar

If California legalizes it, the state would fall into the ocean because 50% of the population would move there immediately.

essieness's avatar

@Carol Lurve for that answer. I actually heard an opinion like that. If they did legalize it, there would be huge issues at the California borders. I know my ass would be on a midnight train to Cali.

Judi's avatar

@Carol ; I bet more people would move in than would move out! I don’t use or even like the stuff, but I don’t like or use abortion either, that doesn’t mean I think everyone else has to subscribe to my beliefs.

essieness's avatar

@Judi Great answer. Lurve.

Waffle's avatar

@Judi “that doesn’t mean I think everyone else has to subscribe to my beliefs.”
Why can’t everyone feel that way?
Lurve.

shockvalue's avatar

Found an intresting article that addresses the issue: The Audacity of Dope

IchtheosaurusRex's avatar

How legal do we want to make it? It’s very easy to grow in temperate climates, and would be difficult to regulate and tax because of that. It would – and does, in fact, escape cultivation. It – hemp – still grows wild in some places where it was grown for rope production during WWII.

The ease with which this drug is produced puts it in a class all by itself. You don’t need a laboratory or any knowledge of chemistry to produce it. All you need is a patch of dirt and some seeds. Preparation of the smokable material involves little more than drying the plant and chopping up the leaves, so you would no doubt see people with little pot patches in their gardens, growing alongside the tomato plants.

I know I’m jumping into this discussion pretty late, so I thought I’d toss that angle out. Most discussions of this topic mention the tax windfall for states like California. I think much of that potential would go up in smoke pretty quickly. There is no way you could ever control private production, so you could not levy a high tax on the stuff.

Judi's avatar

Do it the same as tabacco and alcohol.

IchtheosaurusRex's avatar

@Judi , I get that, but it’s easier to cultivate marijuana than it is to grow tobacco. It would have to be something similar to beer and wine, for tax purposes, as people have been able to make that at home for centuries. If you raised the state tax on beer by $10 a six-pack, you would see a pretty big spike in home brew supplies. But growing your own pot is even easier than making beer. They don’t call it “weed” for nothing.

This is not to say we should forget it. The primary impetus for legalizing it is to take the profit away from the drug cartels and reduce the expense of enforcing laws that are not effective anyway. But I don’t think it would be a big revenue producer for states.

Judi's avatar

Most people would still buy it. Tomatoes are easy to grow too. It I ain’t planting a garden.

bea2345's avatar

If it were legal Jamaica could balance its budget in short order. And our prisons would lose at least half of their inhabitants.

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