The Economic Impact of Legalising Marijuana

Subject: Health Care
Type: Synthesis Essay
Pages: 9
Word count: 2545
Topics: Medical Marijuana, Government, Marijuana Legalization

While Marijuana is illegal in most countries due to its addictive nature and other reasons such as its connection to a certain race, there is no legitimate reason as to why the drug is illegal yet. It was known as cannabis in the 1900s; but later, the federal authorities started using Marijuana which is a Spanish word in an attempt to link it to the Mexicans. However, if its use is controlled and regulated, it has been found to be of great medicinal value. The goal of this paper is to show that the economic impact of legalising marijuana is that it will help create jobs and generate revenue for the economy to grow. Legalising marijuana can also be beneficial in threatening medical issues.

To achieve this goal, I have organised this paper into six main sections. The first section focuses on the medicinal benefits of marijuana, while the next section focuses on the challenges of legalising marijuana. This section is followed by the positive effects of its legalisation to the economy. The fourth section looks at the influence of marijuana as a gateway drug and how this can be regulated. The last two sections focus on current laws for and against legalisation of marijuana, as well as regulatory laws in countries where it has been legalised, and the negative results of the legalisation of marijuana.

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Medical Marijuana

Marijuana has been used as an agent for achieving euphoria since ancient times, it was described in a Chinese medical reference traditionally considered to date from 2737 BC (Ghosh et al., pg. 991). Marijuana can also be used as a medication for rheumatism, gout, malaria and oddly enough- absent-mindedness. Chinese medical text (1578 A.D), centuries later, also described marijuana as a treatment for vomiting, parasitic infections, and haemorrhage (Mack et al., pg 15). Moreover, during mediaeval times, Arab traders spread their knowledge of marijuana’s medicinal properties to Africa and it was used widely to treat snakebites, dysentery, Malaria and labour pains. Thus, the foregoing are some of the known medicinal uses of marijuana.

Challenges Faced By the Legalisation of Marijuana

While some states have legalised marijuana for adults and others for people with some ailments, there is still a problem when it comes to regulation of its use and sale. This is due to the fact that the drug has been illegal for a long time, and is still illegal in many States, so when a State legalises its use, it is upon the State to regulate and control its use.

The Black Market

Legalisation of marijuana does not guarantee an end to its sale in the black market. States that legalise its use are tasked with the responsibility of eliminating the black market and keeping corner dealers and drug cartels out of the legal drug market. Most consumers prefer buying products from legal suppliers because it is then that they can question the quality of the product and report to relevant authorities in case of disagreements or dissatisfaction with the product (Caulkins et al., p. 34). This facilitates buying from high-quality sellers and avoids the sale of counterfeit or low-quality goods. For this reason, black markets rarely arise despite the regulation and taxation costs on legal goods. The black markets arise when the government imposes excess taxes and high costs of regulation. In the United States, most of the market came to the legal sphere after the repeal of the Alcohol Prohibition in 1933, except for States which continued with the prohibition or imposed excessive taxes (“Marijuana Tax Data Archive”, n.p.). The market has also not been fully brought to the legal sphere due to limitations on the number of outlets or shops and the specific amounts customers can buy as well as the location of these stores. Therefore, over-regulation is another hindrance to the elimination of the black market.  Hence, it upon these governments to ensure that the taxes are high enough to cover the regulatory costs, but not so high that the dealers prefer to stay in the shadows and operate within the black market.

Cash, crime, and security are yet another challenge. While legal marijuana is among the fastest growing industries in the United States, some banks which are regulated by the federal government still refuse to work with such industries as they fear to break some laws. This is due to the fact that the drug is still illegal under the federal law. It has, therefore, become an uphill task for entrepreneurs to handle the huge amount of cash in this line of business (Ghosh et al, pg. 992). The fact that these huge amounts of money are being carried around by these entrepreneurs is an invitation to crime. To ensure the security of their money, entrepreneurs have to employ private security companies. Since entrepreneurs in this line of business have to carry the money around, it makes it difficult for them to even pay taxes, resulting in penalties for withholding tax since they cannot pay the taxes electronically.

Laws also pose a major challenge to the legalization of marijuana. As much as it has been legalized in some states in the United States, marijuana is still illegal under federal law. This means that at any time when the federal government feels that the legalization is more harmful than beneficial, they can challenge the legalization (BBC News, n.p.).

Mental Health

Legalization is likely to result in increased use of marijuana by adults and youth. Teens under 17 years using marijuana are 60 percent less likely to graduate from high school compared to their peers who do not use the drug. They are also 18 times more likely to be addicted to the drug, 7 times more likely to attempt suicide, and 8 times more likely to abuse other illicit drugs in future (Silins et al., pg. 290). Marijuana use also contributes to car accidents because it negatively affects judgment, hand and motor coordination, as well as reaction time. The effect of marijuana on mental health can, therefore, not be overlooked as a challenge to its legalization.

Advantages of Marijuana on the Economy of the Country

Despite the challenges discussed above, legalization of marijuana has its own advantages on the economy of the country in which it is legalized.

Income and Jobs

Legalization of marijuana has created employment opportunities for so many people. Business owners can now set up nurseries for growing marijuana, which in turn creates employment for people and becomes a source of income for these employees while yielding profits for the employers. Consequently, it adds economic benefits to the community and the country. Legalization of marijuana in Colorado created more than eighteen thousand full-time job opportunities and added approximately 2.4 billion dollars to the economy of the state of Colorado in 2016 (“Marijuana Tax Data Archive”, n.p.).

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Impact on Tax Revenue

Legalization of marijuana in States such as Colorado has greatly contributed to the tax revenue. In 2015, Colorado received more than 135 million dollars in tax revenue, from recreational and medical marijuana. With such great revenue, it is clear that legalization of marijuana is of great economic benefit to the State. Other than Colorado, States such as Denver collected 3.5 million dollars from sales tax, application, and license fees for its medical marijuana. Also, Oregon has raised an estimated 6.7 million dollars in taxes. These are clear examples of how the economy benefits from legalization of marijuana (Garrison, n.p.).

Impact on Public Health and Healthcare

Legalization of marijuana leads to increased access to the product by the public. Of major concern is the increased access to marijuana, as a recreational drug, by adolescents and the youth since the drug has some potential negative health effects. However, survey data has not revealed the prevalence of the use of the drug in Colorado among the youth. A survey of middle school and high school showed that whereas the proportion perceiving marijuana as highly risky decreased from 58% in 2011 to 54% in 2013, the proportion reporting to have used the drug in the previous 30 days dropped from 22% to 20% over the same period, and the proportion reporting ever having used marijuana decreased from 39% to 37% (“Marijuana Tax Data Archive”, n.p.). These numbers imply that the perceived risk and use remained the same even with the increased availability of marijuana. Commercialization of marijuana also led to the proliferation of consumable marijuana products such as baked foods, cookies, and beverages. While the use of these products was supposed to be under the guidance of a caregiver, little attention has been developed to regulate the dosage of such products. Moreover, due to the legalization of cultivation and improvement of growth conditions of marijuana, its potency has increased. Its high performance and availability of wide range of products are of great threat to public health (Ghosh et al., pg. 993).

Police Diversion

Marijuana arrests are many and take time to process. For example in the US, every year, the police make over 700,000 marijuana arrests and take an average of an hour to process such arrests (Natalie, n.p. ). Additionally, the number of police in the narcotics department has reduced due to reduced funding from these drug arrests. Resources are therefore rarely allocated to such departments. Legalizing marijuana would therefore free police officers to focus on more important issues as well as provide funding for other departments.

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Cut Government Expenses

Since the industry is one of the most lucrative and contributes heavily to the tax revenue, this revenue contributes to government sectors such as health, infrastructure, and education. Furthermore, the government no longer has to invest in measures to suppress its use and sale, as would have been the case if the drug was illegal. Funds that were for this purpose can then be directed towards other government projects. Legalization would also cut prison spending (“Opinion | Marijuana Economics,”n.p.). Arrests related to the drug would reduce thus greatly reducing the prison population and consequently reduce spending on maintenance in prisons. Cutting down on the number of men imprisoned for drug-related offenses would contribute to the growth of the economy. This would give them an opportunity to go back to their families and participate in their communities economically, thus boosting the economic growth of the society as well as that of their family. This would be one of the ways of dealing with poverty. Legalizing the cultivation of marijuana would also lead to the reduction of illegal farming, illegal fertilizers, and other problems that would lead to environmental pollution. As a result, the government would save money used on environmental agencies and measures to deal with this pollution (BBC News, n.p.).

Criminal Justice

Legalization of marijuana would mean that transporting, manufacture, and distribution of marijuana or related products would no longer be considered illegal. Criminal justice agencies would, therefore, reduce enforcement tasks related to such crimes. This also means that money allocated for arresting, persecuting, sentencing and incarcerating marijuana users would be directed towards other causes. This would consequently lead to a reduction in the agencies’ expenses (“Marijuana, Medicine, and the Law,”n.p.).

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Marijuana as a Gateway Drug

Most heroin users started taking drugs in their early teens, usually beginning with alcohol and marijuana. Use of marijuana is positively correlated with alcohol and cigarette use. This means that people who use marijuana are more likely to consume other legal or illegal drugs than those who do not use marijuana. People addicted to marijuana are three times more likely to be addicted to heroin (DuPont, n.p.). Legalization of marijuana would, therefore, increase its availability and use. This would be a threat to public health because its use will increase the risk of heroin use. This, therefore, calls for regulation of the drug if legalized. If measures to regulate the drug are not put in place, the legalization of marijuana could cause more harm than good.

Current Laws

Twenty-nine States and the District of Columbia presently possess laws legalizing marijuana in various forms. Most legislatures in States which have legalized marijuana are discussing regulatory proposals around the sale and use of marijuana. Massachusetts lawmakers, earlier this year, were also weighing bills aimed at lowering the amount of marijuana that can be possessed legally by residents and also restrictions on retail stores. Certain States have decriminalized possession of small amounts of marijuana, while other states have allowed the use of marijuana solely for some medical conditions. Some States also have not legalized the use of marijuana but provide limited access under certain circumstances. States such as Virginia enacted laws allowing possession of marijuana for individuals with prescriptions from doctors (Ghosh et al., 992).

Effects- Negative and Positive

Despite the immense contribution the legalization of marijuana has on the economy, its bad side cannot be overlooked. One of the results is teen marijuana use. Even with efforts to regulate the use of marijuana, teen use is still a huge problem. Surveys in States where marijuana is legal such as Colorado and Washington indicate no significant change in the use of marijuana since the legalization law was passed. These possesses a threat to public health as it has been shown that people who start using marijuana in their teens are prone to addiction and are at a higher risk of other mental health related problems (Caulkins et al., pg. 37). Legalization has also had little or no impact on the number of car accidents. In the States where marijuana is legalized, drivers involved in fatal accidents are now more likely to test positive for marijuana (Ghosh et al., pg. 993).

In conclusion, it is evident that legalization of marijuana has brought great benefits to the economy of the States mentioned above. Setting proper regulations in place to govern the use and sale of marijuana in these States, will guarantee even greater benefits to these economies.

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